FULLTEXT DEL 1 AV 2
Kvartalsrapport Q1 2025
===== SIDA 1 =====
Condensed Interim
Consolidated Financial Statements
31 March 2025
===== SIDA 2 =====
Condensed Interim
Consolidated Financial Statements
31 March 2025
Kvika banki hf. Katrínartún 2 105 Reykjavík Iceland Reg. no. 540502‐2930
===== SIDA 3 =====
Kvika banki hf.
Table of Contents
Page
1
2
4
5
6
7
9
10
11
13
15
18
26
42
46
Condensed Interim Consolidated Statement of Financial Position ..................................................................................
Condensed Interim Consolidated Statement of Changes in Equity .................................................................................
Notes to the Condensed Interim Consolidated Financial Statements .............................................................................
‐ General information ......................................................................................................................................................
Condensed Interim Consolidated Statement of Cash Flows ............................................................................................
‐ Risk management ..........................................................................................................................................................
‐ Financial assets and financial liabilities .........................................................................................................................
‐ Income statement ..........................................................................................................................................................
‐
Statement of Financial Position .....................................................................................................................................
‐ Other information ..........................................................................................................................................................
‐ Segment information .....................................................................................................................................................
Condensed Interim Consolidated Income Statement ......................................................................................................
Endorsement and Statement by the Board of Directors and the CEO .............................................................................
Kvika highlights .................................................................................................................................................................
Condensed Interim Consolidated Statement of Comprehensive Income ......................................................................
Condensed Interim Consolidated Financial Statements 31 March 2025 ‐ Unaudited
===== SIDA 4 =====
Highlights
31.03.2025
Kvika in brief
Kvika is a challenger bank listed on the Nasdaq Iceland,
offering a broad range of solutions for individuals,
businesses, and investors.
Kvika operates in four business segments: Commercial
banking, Investment Banking, Asset Management and UK
operations, the latter through subsidiaries Kvika Asset
Management and Kvika Limited.
Kvika’s operations are underpinned by a distinctive brand
strategy. Retail financial services are delivered through
specialized consumer brands such as Auður, Aur,
Netgíró, and Lykill, each focused on a specific customer
nee, while corporate and institutional services are
provided under the Kvika and Kvika Asset Management
brands
Diversified operations
Revenues by segment / Q1 2025
Key figures
ISK m. 3M 2025 3M 2024
Net operating income 4,449 4,069
Profit before tax, continuing
operations
701 1,215
RoTE, continuing operations 7.8% 15.5%
31.03.2025 31.12.2024
Total Assets 342,816 354,594
Loans to customers 160,583 150,203
Deposits 168,021 163,377
LCR 279% 360%
NSFR 159% 144%
87/100
Reitun ESG score
Baa2/Prime-2
Stable
Q1 24 Q2 24 Q3 24 Q4 24
4.1 4.0
4.5 4.7
Q1 25
4.4
Net operating income
ISK bn.
Loans to customers
ISK bn.
Total capital ratio
(%)
LCR ratio
(%)
0
20
40
60
80
100
120
140
160
180
200
220
240
0
20
40
60
80
100
120
140
160
180
92.0%
Q1 24
91.0%
Q2 24
89.0%
Q3 24
92.0%
Q4 24
146 147 146 150
Q1 25
161
95.5%
Loans to deposits*
0
5
10
15
20
25
30
35
40
45
50
0
5
10
15
20
25
19.0%
Q1 24
19.4%
Q2 24
20.6%
Q3 24
19.9%
Q4 24
21.7% 22.1% 23.5% 22.8%
Q1 25
20.2%
23.0%
CET1
-100
0
100
200
300
400
500
600
700
800
900
0
100
200
300
400
500
600
700
800
137%
Q1 24
142%
Q2 24
148%
Q3 24
144%
Q4 24
286%
475%
780%
360%
Q1 25
279%
159%
NSFR
24.4%
14.3%
18.0%
7.6%
35.7%
Commercial Banking
Investment Banking
Asset Management
UK
Treasury and supporting units
*Money market deposits were previously presented as part of borrowings but are now presented as part of deposits. Comparative figures have been restated.
Reference is made to note 2 in Kvika’s Consolidated Financial Statements dated 31.12.2024 for further information
===== SIDA 5 =====
Kvika banki hf.
Endorsement and Statement
by the Board of Directors and the CEO
About the Bank
Operations during the period in 2025
Financial position
TM sale finalised
Capital adequacy and dividends
Following the completion of the sale of TM in February 2025, the Group is no longer designated by the Financial Supervisory Authority of the Central
Bank of Iceland as a financial conglomerate as defined in Article no. 3 of Act no. 61/2017 on Additional Supervision of Financial Conglomerates.
These are the Condensed Interim Consolidated Financial Statements of Kvika banki hf. ("Kvika" or the "Bank") and its subsidiaries (together the
"Group") for the period 1 January to 31 March 2025. The Condensed Interim Consolidated Financial Statements have not been audited or reviewed by
the Bank's independent auditors.
Kvika operates as well as a house of brands that are highly focused and excel in their field. The main brands are Kvika, Kvika Asset Management, Auður,
Aur, Lykill, Netgíró, and Straumur, as well as
Ortus Secured Finance in the UK.
Kvika is a specialized financial institution strategically positioned to increase competition and transform financial services in Iceland. Opera ting without
a branch network, Kvika provides businesses, investors, and individuals with investment banking, asset management, payment, and banking services .
The Bank is listed on the main list of Nasdaq OMX Iceland.
Kvika operates in four business segments, two which are operated under the Kvika Bank brand, Commercial Banking and Investment Banking, and two
in own‐brand subsidiaries, Kvika Asset Management and Kvika Limited, the Group's operations in the UK.
Profit before taxes from continuing operations for the first quarter amounted to ISK 701 million (3m 2024: ISK 1,215 m illion). Pre‐tax annualised return
on weighted tangible equity (RoTE) from continuing operations was 7.8% for the quarter compared to 15.5% during the period in 2024, based on the
tangible equity position of Kvika, net of TM, at the beginning of the year adjusted for changes in share capital and transactions with treasury shares
during the year. Profit after taxes, including discontinued operations, for the
first quarter amounted to ISK 2,086 million (3m 2024: ISK 1,083 million).
According to the Consolidated Statement of Financial Position, equity at the end of the period amounted to ISK 67,599 million (31.12. 2024: ISK 89,517
million), and total assets amounted to ISK 342,816 million (31.12.2024: ISK 354,594 million).
The Group's statement of financial position grew by ISK 11.8 billion or 3.3% during the period in 2025. Loans to customers grew by ISK 10.4 b illion or
6.9% during the period. Liquid assets amounted to ISK 130 billion at end of March 2025, which is equal to 37.9% of total assets and 81% of loans to
customers.
On 28 February 2025 Kvika and Landsbankinn hf. ("Landsbankinn") finalised the sale of 100% of TM tryggingar hf. ("TM") share capital to Landsbankinn.
The handover of the insurance company took place simultaneously, with Landsbankinn paying Kvika the agreed purchase price upon completion. As
previously communicated by Kvika on 30 May 2024, the final purchase price has been adjusted based on changes in TM’s tangible equity from the
beginning of 2024 until the closing date, 28 February 2025. The initially agreed purchase price was ISK 28.6 b illion, but the adjusted purchase price
amounts to approximately ISK 32.3 billion, reflecting the 2024 purchase price adjustment. According to a preliminary adjustment for the period from 31
December 2024 to 28 February 2025, the final purchase price is expected to be ISK 32.2 billion.
The Group's net operating income during the period was ISK 4,449 million (3m 2024: ISK 4,069 m illion). Net interest income amounted to ISK 2,917
million (3m 2024: ISK 2,326 million). Net fee income amounted to ISK 1,520 million (3m 2024: ISK 1,633 m
illion). Other net operating income amounted
to ISK 12 million (3m 2024: ISK 110 m illion). Administrative expenses during the period amounted to ISK 3,090 million (3m 2024: ISK 2,666 m illion).
During the period, the Group had a net impairment charge of ISK 65 million (3m 2024: ISK 188 million).
In mid‐January 2025, Kvika completed the sale of 3.25 ‐year floating‐rate bonds totalling SEK 600 million and NOK 400 million. These bonds were priced
at a spread of 200 basis points over 3 ‐month STIBOR (for the SEK tranche) and 3 ‐month NIBOR (for the NOK tranche). With over 20 investors
participating, it marked Kvika's largest international bond issuance to date.
In March 2025, Kvika completed the acquisition of the remaining management shares in Ortus Secured Finance ltd. ("OSF"). The transaction s upports
refinancing and streamlining of Kvika’s UK operations. An expense of ISK 580 million was recognized in the income statement, reflecting the revaluat ion
of the contingent consideration for the remaining purchase price of OSF.
The Bank's 2025 A nnual General Meeting ("AGM") approved a motion from the Board of Directors ("BOD") to renew the BOD's authorisation from the
Bank's 2024 AGM to purchase up to 10% of own shares subject to regulatory approvals. This authorisation applies until the next AGM in 2026. In
February 2025, based on authorisation from the AGM and approval from the Financial Supervisory Authority of the Central Bank of Iceland, the BOD
decided to establish a buy ‐back programme to carry out the purchase of shares for a total consideration amount of ISK 5 billion but for no higher
nominal amount than 400,000,000 shares.
The Central Bank's Resolution Authority presented the Group with their first minimum requirement for own funds and eligible liabilities (MREL) in
January 2025. The MREL requirements, including the combined buffer requirement, are 28.4% of RWEA and 6.0% of total exposure measure ("TEM"). At
the end of March 2025 these ratios were 46.3% and 31.1% respectively.
Kvika's continues to maintain a strong capital position, significantly above regulatory requirements. At the end of March 2025, the Group’s capital
adequacy ratio was 23.0% and CET1 ratio was 20.2%, excluding unaudited interim earnings for the first quarter of 2025. This compares to regulatory
requirements of 18.0% and 12.9%, including capital buffers.
Condensed Interim Consolidated Financial Statements 31 March 2025 ‐ Unaudited 2
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Kvika banki hf.
Endorsement and Statement
by the Board of Directors and the CEO
Risk management
Statement by the Board of Directors and the CEO
Sigurður Hannesson, Chairman
Helga Kristín Auðunsdóttir, Deputy Chairman
Ingunn Svala Leifsdóttir
Guðjón Reynisson
Páll Harðarson
Chief Executive Officer
Ármann Þorvaldsson
The Condensed Interim Consolidated Financial Statements of Kvika banki hf. for the period ended 31 March 2025 are electronically certificated by the
Board of Directors and the CEO.
The Condensed Interim Consolidated Financial Statements of Kvika banki hf. for the period 1 January to 31 March 2025 have been prepared in
accordance with IAS 34 Interim Financial Reporting as adopted by the EU, and additional requirements, as applicable, in the Act on Annual Accounts no.
3/2006, the Act on Financial Undertakings no. 161/2002 and rules on accounting for credit institutions no. 834/2003.
To the best of our knowledge these Condensed Interim Consolidated Financial Statements give a true and fair view of the Group's assets, liabilities an d
financial position as at 31 March 2025 and the financial performance of the Group and changes of cash flows for the period 1 January to 31 March 2025.
Furthermore, in our opinion the Condensed Interim Consolidated Financial Statements and the Endorsement of the Board of Directors and the CEO give
a fair view of the development and performance of the Group's operations and its position and describe the principal risks and uncertainties faced by
the Group.
The Board of Directors and the CEO of the Bank have today discussed the Condensed Interim Consolidated Financial Statements for the period 1
January to 31 March 2025 and confirmed them by the means of their signatures.
Reykjavík, 7 May 2025.
Board of Directors
The objective of risk management is to promote a good and efficient culture of risk awareness within the Group and to increase the understanding of
employees and management on the Group's risk taking, in addition to an assessment process related to risk and capital position. An emphasis is placed
on being up to speed on the latest developments and adoption of rules related to risk management, such as regarding capital ‐ and liquidity
management. The Group faces various risks associated with its operations as a financial institution that arise from its day ‐to‐day operations. Active risk
management entails analysing risk, measuring it and taking actions to limit it, as well as monitoring risk factors across the Group. The Group's risk
management and main operations are described in the notes accompanying the Consolidated Financial Statements. Refer to notes 39 ‐54 on the
analysis of exposure to various types of risk.
The 2025 AGM approved a motion from the BOD that a dividend of ISK 5 per share be paid in the year 2025 on 2024 operations and following the
receipt of the purchase price for TM. Furthermore, the 2025 AGM also approved a motion from the BOD, based on an approval from the Financial
Supervisory Authority of the Central Bank of Iceland, to decrease the share capital of the Bank by 91,073,340 shares by cance lling treasury shares held
by the Bank. In April 2025, both the dividend payment and the share capital
reduction were carried out.
Condensed Interim Consolidated Financial Statements 31 March 2025 ‐ Unaudited 3
===== SIDA 7 =====
Kvika banki hf. Amounts are in ISK thousands
Condensed Interim Consolidated Income Statement
For the period 1 January 2025 to 31 March 2025
Notes 3m 2025 3m 2024
7,300,364 7,105,791
(4,383,859) (4,779,672)
Net interest income 5 2,916,505 2,326,118
1,669,424 1,795,429
(149,261) (162,530)
Net fee and commission income 6 1,520,163 1,632,900
7 (47,751) 23,822
59,705 85,711
Other net operating income 11,953 109,532
Net operating income 4,448,622 4,068,550
9 (3,089,740) (2,665,797)
11 (65,461) (187,950)
12 (592,673) 0
Profit before taxes from continuing operations 700,748 1,214,804
13 (437,836) (151,869)
14 0 (13,138)
15 (77,180) (62,600)
Profit for the period from continuing operations 185,732 987,197
Discontinued operations
3 1,900,729 96,183
Profit for the period 2,086,461 1,083,379
Notes 3m 2025 3m 2024
2,086,461 1,079,337
24 0 4,042
Profit for the period 2,086,461 1,083,379
Earnings per share 16
0.45 0.23
0.45 0.23
The notes on pages 11 to 47 are an integral part of these Condensed Interim Consolidated Financial Statements.
Diluted earnings per share (ISK per share) ..............................................................................................................
Income tax ................................................................................................................................................................
Attributable to the shareholders of Kvika banki hf. ................................................................................................
Attributable to non‐controlling interest ..................................................................................................................
Special tax on financial institutions
.........................................................................................................................
Special tax on financial activity ................................................................................................................................
Basic earnings per share (ISK per share) ..................................................................................................................
Profit after tax from discontinued operations .........................................................................................................
Other operating income ...........................................................................................................................................
Administrative expenses ..........................................................................................................................................
Net impairment ........................................................................................................................................................
Revaluation of contingent consideration ................................................................................................................
Interest income ........................................................................................................................................................
Interest expense .......................................................................................................................................................
Fee and commission income ....................................................................................................................................
Fee and commission expense ..................................................................................................................................
Net financial (expense) income ...............................................................................................................................
Condensed Interim Consolidated Financial Statements 31 March 2025 ‐ Unaudited 4
===== SIDA 8 =====
Kvika banki hf. Amounts are in ISK thousands
Comprehensive Income
For the period 1 January 2025 to 31 March 2025
Notes 3m 2025 3m 2024
Profit for the period 2,086,461 1,083,379
45,872 190,233
24,929 10,079
Changes to reserve for financial assets at fair value through OCI 70,801 200,312
(29,895) 9,465
40,906 209,777
Total comprehensive income for the period 2,127,368 1,293,156
Notes 3m 2025 3m 2024
2,127,368 1,289,114
0 4,042
Total comprehensive income for the period 2,127,368 1,293,156
The notes on pages 11 to 47 are an integral part of these Condensed Interim Consolidated Financial Statements.
Condensed Interim Consolidated Statement of
Attributable to the shareholders of Kvika banki hf. ................................................................................................
Attributable to non‐controlling interest ..................................................................................................................
Exchange difference on translation of foreign operations ...................................................................................
Changes in fair value of financial assets through OCI, net of tax .........................................................................
Realized net loss transferred to the Income Statement, net of tax ......................................................................
Other comprehensive income that is or may be reclassified subsequently to
profit and loss
Condensed Interim Consolidated Financial Statements 31 March 2025 ‐ Unaudited 5
===== SIDA 9 =====
Kvika banki hf. Amounts are in ISK thousands
Condensed Interim Consolidated Statement of Financial Position
As at 31 March 2025
Assets Notes 31.3.2025 31.12.2024*
17 43,909,157 18,593,420
18 24,081,301 11,529,571
19 160,582,831 150,202,696
20 62,165,150 64,794,561
21 5,602,795 5,432,254
22 8,835,823 12,601,026
23 2,572,600 1,196,744
25 111,914 112,855
340,421 0
26 21,440,029 21,693,399
27 222,008 215,168
428,528 543,413
13 1,819,615 2,273,265
28 10,703,784 7,703,693
30 57,702,377
Total assets 342,815,958 354,594,442
Liabilities
46 168,020,757 163,377,879
29 13,915,528 14,389,515
30 47,767,413 37,123,285
31 5,766,866 5,628,982
32 521,286 153,001
33 4,789 42,035
23 646,696 2,932,429
354,631 466,096
34 38,219,103 13,634,905
30 27,329,028
Total liabilities 275,217,069 265,077,155
Equity
35 4,611,532 4,660,180
45,888,135 46,750,093
3,230,715 9,356,543
13,789,861 28,671,825
Total equity attributable to the shareholders of Kvika banki hf. 67,520,242 89,438,641
24 78,646 78,646
Total equity 67,598,888 89,517,287
Total liabilities and equity 342,815,958 354,594,442
* Comparative information has been restated, reference is made to note 2 for further information.
The notes on pages 11 to 47 are an integral part of these Condensed Interim Consolidated Financial Statements.
Non‐controlling interest .....................................................................................................................
Short positions held for trading .........................................................................................................
Short positions used for hedging .......................................................................................................
Share capital .......................................................................................................................................
Share premium ...................................................................................................................................
Other liabilities ...................................................................................................................................
Liabilities associated with assets classified as held for sale ..............................................................
Deferred tax liabilities ........................................................................................................................
Derivatives ..........................................................................................................................................
Cash and balances with Central Bank ................................................................................................
Other assets ........................................................................................................................................
Deferred tax assets .............................................................................................................................
Subordinated liabilities ......................................................................................................................
Derivatives ..........................................................................................................................................
Fixed income securities ......................................................................................................................
Shares and other variable income securities .....................................................................................
Securities used for hedging ................................................................................................................
Loans to customers ............................................................................................................................
Investment in associates ....................................................................................................................
Intangible assets .................................................................................................................................
Property and equipment ....................................................................................................................
Assets classified as held for sale ........................................................................................................
Deposits .............................................................................................................................................
Borrowings .........................................................................................................................................
Investment properties ........................................................................................................................
Other reserves ....................................................................................................................................
Retained earnings ...............................................................................................................................
Loans to credit institutions .................................................................................................................
Issued bonds .......................................................................................................................................
Operating lease assets ........................................................................................................................
Condensed Interim Consolidated Financial Statements 31 March 2025 ‐ Unaudited 6
===== SIDA 10 =====
Kvika banki hf. Amounts are in ISK thousands
Condensed Interim Consolidated Statement of Changes in Equity
For the period 1 January 2025 to 31 March 2025
Deficit Trans‐ Restricted Total share‐ Non‐
Share Share Option reduction Fair value lation retained Retained holders' controlling Total
1 January 2025 to 31 March 2025 Notes capital premium reserve reserve reserve reserve earnings earnings equity interest equity
4,660,180 46,750,093 109,131 1,203,697 (582,818) 79,090 8,547,443 28,671,825 89,438,641 78,646 89,517,287
2,086,461 2,086,461 0 2,086,461
45,872 45,872 45,872
24,929 24,929 24,929
(29,895) (29,895) 0 (29,895)
0 0 0 0 70,801 (29,895) 0 2,086,461 2,127,368 0 2,127,368
(6,165,779) 6,165,779 0 0
21,215 (21,215) 0 0
(48,648) (861,958) (910,606) (910,606)
(23,135,160) (23,135,160) (23,135,160)
(22,170) 22,170 0 0
Equity as at 31 March 2025 4,611,532 45,888,135 86,961 1,203,697 (512,017) 49,195 2,402,878 13,789,861 67,520,242 78,646 67,598,888
The notes on pages 11 to 47 are an integral part of these Condensed Interim Consolidated Financial Statements.
(33,607,571) 45,888,135 86,961 1,154,501 (5,123,549) 49,195 2,315,917 12,586,164 78,646
Restricted due to development costs ..........................................................
Treasury shares acquired as part of a buy‐back programme ...................
Other reserves
Profit for the period .....................................................................................
Restricted due to subsidiaries and associates .............................................
Translation of foreign operations
Exchange difference on translation of foreign operations .......................
Equity as at 1 January 2025 .........................................................................
Total comprehensive income for the period ...............................................
Realized net loss transferred to the Income Statement ..............................
Changes in fair value of financial assets through OCI .................................
Dividend paid to shareholders ..................................................................
Transactions with owners of the Bank
Share options ............................................................................................
Condensed Interim Consolidated Financial Statements 31 March 2025 ‐ Unaudited 7
===== SIDA 11 =====
Kvika banki hf. Amounts are in ISK thousands
Condensed Interim Consolidated Statement of Changes in Equity
For the period 1 January 2024 to 31 March 2024
Deficit Trans‐ Restricted Total share‐ Non‐
Share Share Option reduction Fair value lation retained Retained holders' controlling Total
1 January 2024 to 31 March 2024 Notes capital premium reserve reserve reserve reserve earnings earnings equity interest equity
4,722,073 47,661,777 173,605 1,203,697 (930,231) 86,145 3,796,865 25,171,754 81,885,685 72,119 81,957,804
1,079,337 1,079,337 4,042 1,083,379
190,233 190,233 190,233
10,079 10,079 10,079
Translation of foreign operations
9,465 9,465 0 9,465
0 0 0 0 200,312 9,465 0 1,079,337 1,289,114 4,042 1,293,156
534,880 (534,880) 0 0
5,563 (5,563) 0 0
9,740 9,740 9,740
Equity as at 31 March 2024 4,722,073 47,661,777 183,344 1,203,697 (729,919) 95,610 4,337,308 25,710,648 83,184,538 76,161 83,260,699
The notes on pages 11 to 47 are an integral part of these Condensed Interim Consolidated Financial Statements.
Restricted due to development costs ..........................................................
Other reserves
Changes in fair value of financial assets through OCI .................................
Realized net loss transferred to the Income Statement ..............................
Profit for the period .....................................................................................
Exchange difference on translation of foreign operations .......................
Total comprehensive income for the period ...............................................
Share options ............................................................................................
Restricted due to subsidiaries and associates .............................................
Transactions with owners of the Bank
Equity as at 1 January 2024 .........................................................................
Condensed Interim Consolidated Financial Statements 31 March 2025 ‐ Unaudited 8
===== SIDA 12 =====
Kvika banki hf. Amounts are in ISK thousands
Condensed Interim Consolidated Statement of Cash Flows
For the period 1 January 2025 to 31 March 2025
Cash flows from operating activities Notes 3m 2025 3m 2024*
2,086,461 1,083,379
55,660 (116,490)
480,013 269,978
(2,916,505) (2,326,118)
65,461 187,950
515,016 227,607
(1,900,729) (69,833)
0 9,740
(1,614,624) (733,788)
Changes in:
(7,557,338) 0
(10,478,467) 8,271,541
2,543,076 (456,603)
(170,541) 4,145,807
2,489,407 (8,162,422)
(1,375,856) (567,357)
(20,987) 46,017
(3,200,092) (4,996,583)
4,239,967 2,717,880
331,039 631,386
(2,425,250) 134,775
1,330,003 1,449,778
(14,295,040) 3,214,219
6,990,904 6,675,176
(3,704,009) (4,025,428)
(73,534) (181,928)
Net cash (to) from operating activities (12,696,302) 4,948,251
Cash flows from investing activities
26 (69,878) (144,800)
(38,885) 5,924
32,284,578 0
Net cash from (to) investing activities 32,175,815 (138,876)
Cash flows from financing activities
931,958 5,769,735
10,644,128 0
(910,606) 0
(100,415) (91,888)
Net cash from financing activities 10,565,064 5,677,847
30,044,577 10,487,222
22,500,191 19,856,184
339,328 33,557
Cash and cash equivalents at the end of the period 17 52,884,096 30,376,963
Cash and cash equivalents
17 43,909,157 25,770,001
17 (5,745,226) (3,879,292)
18 14,720,164 8,486,254
Cash and cash equivalents at the end of the period 52,884,096 30,376,963
* Comparative information has been restated, reference is made to note 2 for further information.
The notes on pages 11 to 47 are an integral part of these Condensed Interim Consolidated Financial Statements.
Cash and balances with Central Bank ..........................................................................................................
Loans to credit institutions ‐ Bank accounts ................................................................................................
Restricted balances with Central Bank ‐ fixed reserve requirement ...........................................................
Net interest income ...................................................................................................................................
Income tax and special tax on financial activity and institutions .............................................................
Net impairment .........................................................................................................................................
Other assets ...............................................................................................................................................
Operating lease assets ...............................................................................................................................
Derivatives ‐ liabilities ...............................................................................................................................
Deposits ....................................................................................................................................................
Short positions ...........................................................................................................................................
Other liabilities ..........................................................................................................................................
Other adjustments .....................................................................................................................................
Profit for the period .....................................................................................................................................
Adjustments for:
Indexation and exchange rate difference .................................................................................................
Depreciation and amortisation .................................................................................................................
Adjustment relating to assets held for sale ...............................................................................................
Derivatives ‐ assets ....................................................................................................................................
Fixed income securities .............................................................................................................................
Shares and other variable income securities ............................................................................................
Securities used for hedging .......................................................................................................................
Loans to customers ....................................................................................................................................
Loans to credit institutions ........................................................................................................................
Effects of exchange rate fluctuations on cash and cash equivalents ..........................................................
Cash and cash equivalents at the beginning of the year .............................................................................
Net change in cash and cash equivalents ....................................................................................................
Repayment of lease liabilities ......................................................................................................................
Issued bonds ................................................................................................................................................
Borrowings ...................................................................................................................................................
Disposal of subsidiary and associates, net of cash ......................................................................................
Interest received ..........................................................................................................................................
Acquired own shares ....................................................................................................................................
Additions of intangible assets ......................................................................................................................
Net acquisition of property and equipment ................................................................................................
Interest paid .................................................................................................................................................
Income tax paid ............................................................................................................................................
Condensed Interim Consolidated Financial Statements 31 March 2025 ‐ Unaudited 9
===== SIDA 13 =====
Kvika banki hf.
Notes to the Condensed Interim Consolidated Financial Statements
0
General information Page Risk management Page
1 Reporting entity ............................................................................ 11 39 Hedging ........................................................................................... 26
2 Basis of preparation ..................................................................... 11 40 Credit risk ‐ overview ...................................................................... 26
3 Discontinued operations .............................................................. 12 41 Maximum exposure to credit risk .................................................. 27
42 Credit quality of financial assets .................................................... 27
Segment information 43 Loan‐to‐value ................................................................................. 32
4 Business segments ....................................................................... 13 44 Collateral against exposures to derivatives ................................... 32
45 Large exposures .............................................................................. 32
Income statement 46 Liquidity risk ................................................................................... 33
5 Net interest income ...................................................................... 15 47 Market risk ...................................................................................... 37
6 Net fee and commission income .................................................. 15 48 Interest rate risk ............................................................................. 37
7 Net financial (expense) income .................................................... 16 49 Interest rate risk associated with trading portfolios ...................... 37
8 Foreign currency exchange difference ......................................... 16 50 Interest rate risk associated with non‐trading portfolios .............. 38
9 Administrative expenses .............................................................. 16 51 Exposure towards changes in the CPI ............................................ 39
10 Salaries and related expenses ...................................................... 16 52 Currency risk ................................................................................... 39
11 Net impairment ............................................................................ 16 53 Equity risk ....................................................................................... 41
12 Revaluation of contingent consideration ..................................... 16 54 Operational risk .............................................................................. 41
13 Income tax .................................................................................... 17
14 Special tax on financial activity .................................................... 17 Financial assets and liabilities
15 Special tax on financial institutions .............................................. 17 55 Accounting classif. of financial assets and financial liabilities ....... 42
16 Earnings per share ........................................................................ 17 56 Financial assets and financial liabilities measured at fair value .... 43
Statement of Financial Position
17 Cash and balances with Central Bank .......................................... 18 Other information
18 Loans to credit institutions ........................................................... 18 57 Pledged assets ................................................................................ 46
19 Loans to customers ...................................................................... 18 58 Related parties ............................................................................... 46
20 Fixed income securities ................................................................ 18 59 Others matters ............................................................................... 47
21 Shares and other variable income securities ............................... 19 60 Events after the reporting date ...................................................... 47
22 Securities used for hedging .......................................................... 19
23 Derivatives .................................................................................... 19
24 Group entities ............................................................................... 20
25 Investment in associates .............................................................. 20
26 Intangible assets ........................................................................... 20
27 Operating lease assets .................................................................. 21
28 Other assets .................................................................................. 21
29 Borrowings ................................................................................... 21
30 Issued bonds ................................................................................. 22
31 Subordinated liabilities ................................................................ 22
32 Short positions held for trading ................................................... 22
33 Short positions used for hedging ................................................. 22
34 Other liabilities ............................................................................. 23
35 Share capital ................................................................................. 23
36 Capital adequacy ratio (CAR) ........................................................ 24
37 Leverage ratio ............................................................................... 25
38 Minimum requirements for own funds
and eligible liabilities (MREL) ....................................................... 25
Condensed Interim Consolidated Financial Statements 31 March 2025 ‐ Unaudited 10
===== SIDA 14 =====
Kvika banki hf. Amounts are in ISK thousands
Notes to the Condensed Interim Consolidated Financial Statements
0
General information
1. Reporting entity
2. Basis of preparation
a. Statement of compliance
b. Basis of measurement
‐
‐
‐
‐
‐
‐
‐ shared based payment is accounted for in accordance with IFRS 2;
‐
‐
c. Functional and presentation currency
d. Going concern
e. Estimates and judgements
f. Relevance and importance of notes to the reader
Information about areas of estimation uncertainty and critical judgements made by management in applying accounting policies that can have a
significant effect on the amounts recognised in the Condensed Interim Consolidated Financial Statements, is provided in the Consolidated Financia l
Statements as at and for the year ended 31 December 2024.
In order to enhance the informational value of the Condensed Interim Consolidated Financial Statements, the notes are evaluated based on
relevance and importance for the reader. This can result in information, that has been evaluated as neither important nor relevant for the reader,
not being
presented in the notes.
Kvika banki hf. ("Kvika" or the "Bank") is a limited liability company incorporated and domiciled in Iceland, with its registered office at Katrínart ún 2,
Reykjavík. The Bank operates as a bank based on Act No. 161/2002, on Financial Undertakings, and is supervised by the Financial Supervisory
Authority of the Central Bank of Iceland ("FME"). Following the completion of the sale of TM in February 2025, the Group is no longer designated by
the FME as a financial conglomerate as defined in Article no. 3 of Act no. 61/2017 on Additional Supervision of Financial Conglomerates.
The Condensed Interim Consolidated Financial Statements were approved and authorised for issue by the Board of Directors and the CEO on 7 May
2025.
The Condensed Interim Consolidated Financial Statements have been prepared in accordance with International Accounting Standard IAS 34
Interim Financial Reporting, as adopted by the European Union and additional requirements, as applicable, in the Act on Annual Accounts no.
3/2006, the Act on Financial Undertakings no. 161/2002 and rules on accounting for credit institutions no. 834/2003.
The Condensed Interim Consolidated Financial Statements have
been prepared using the historical cost basis except for the following:
The Condensed Interim Consolidated Financial Statements for the period ended 31 March 2025 comprise Kvika banki hf. and its subsidiaries
(together referred to as the Group). The Group operates four business segments, Asset Management, Commercial Banking, Investment Banking
and UK operations. Operating without a branch network, Kvika provides businesses, investors, and individuals with investment banking, asset
management, payment, and banking services.
fixed income securities are measured at fair value;
shares and other variable income securities are measured at fair value;
The Bank's management has assessed the Group's ability to continue as a going concern and is satisfied that the Group has the resources to
continue its operations.
The preparation of interim financial statements in accordance with IFRSs requires management to make judgements, estimates and assumptions
that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ
from these estimates.
The Condensed Interim Consolidated Financial Statements are prepared in Icelandic krona (ISK), which is the Group's functional currency. All
financial information has been rounded to the nearest thousand, unless
otherwise stated.
securities used for hedging are measured at fair value;
The Group's assets and liabilities which are denominated in other currency than ISK are translated to ISK using the exchange rate as at the end of
day 31 March 2025.
The estimates and underlying assumptions are based on historical results and various other factors that are believed to be reasonable under the
circumstances, the results of which form the basis of making the judgements about carrying amounts of assets and liabilities that are not readily
apparent from other sources.
The estimates and underlying assumptions are reviewed on an on ‐going basis. Revisions to accounting estimates are recognised in the period in
which the estimate is revised if the revision affects only that period or in the period and future periods if the revision affects both current and
future periods.
derivatives are measured at fair value;
short positions are measured at fair value.
investment properties are measured at fair value;
certain loans to customers which are measured at fair value;
contingent
consideration is measured at fair value; and
Condensed Interim Consolidated Financial Statements 31 March 2025 ‐ Unaudited 11
===== SIDA 15 =====
Kvika banki hf. Amounts are in ISK thousands
Notes to the Condensed Interim Consolidated Financial Statements
0
g. Change in presentation
Restated
31.12.2024 Reclassified 31.12.2024
Assets:
28,319,192 (9,725,772) 18,593,420
0 11,529,571 11,529,571
9,507,492 (1,803,799) 7,703,693
316,767,759 316,767,759
354,594,442 0 354,594,442
Liabilities and Equity:
265,077,155 265,077,155
89,517,287 89,517,287
354,594,442 0 354,594,442
Restated
Lines in the Consolidated Statement of Cash Flows 3m 2024 Restated 3m 2024
(4,942,559) (54,023) (4,996,583)
23,681,453 (3,825,269) 19,856,184
34,256,255 (3,879,293) 30,376,963
3. Discontinued operations
31.3.2025 31.12.2024
0 57,702,377
0 (27,329,028)
0 (55,207)
Net assets directly associated with disposal group 0 30,318,143
31.3.2025 31.12.2024
30,318,143 26,830,002
1,900,729 3,460,071
(32,284,578) 0
67,920 0
(2,214) 28,070
0 30,318,143
Cash and balance with Central bank .................................................................................................................
Liabilities ...........................................................................................................................................................
Equity .................................................................................................................................................................
Total liabilities and equity
All other assets ..................................................................................................................................................
Loans to credit institutions ...............................................................................................................................
Other assets .......................................................................................................................................................
Cash and cash equivalents at the end of the period ........................................................................................
Total assets
Set out below is the reconciliation of Net assets directly associated with disposal group:
Assets classified as held for sale ..............................................................................................................................................
Liabilities associated with assets classified as held for sale ....................................................................................................
Eliminations with the Group ....................................................................................................................................................
Other adjustments ...................................................................................................................................................................
Balance at the beginning of the year .......................................................................................................................................
Payment ...................................................................................................................................................................................
Net assets directly associated with disposal group
Profit after tax from discontinued operations ........................................................................................................................
Adjustment to the estimated final purchase price ..................................................................................................................
As at 31 March 2025 the Group has changed the way it presents cash and balances with central bank. The Group now presents loans to credit
institutions as a separate line item in the statement of financial position. That line item includes balances with other credit institutions, which w ere
previously included as part of cash and balances with central bank and other assets. The comparative figures for 31 December 2024 in the
statement of financial position, 3m 2024 in the Consolidated Statement of Cash Flows and in the notes have been restated.
The table below shows the effect of the reclassification on the Consolidated Statement of Financial
Position at 31 December 2024:
On 28 February 2025 Kvika and Landsbankinn hf. finalised the sale of 100% of TM tryggingar hf. share capital to Landsbankinn hf. as specified in
note 59.
Other assets .......................................................................................................................................................
Cash and balances with Central Bank at the beginning of the year .................................................................
Condensed Interim Consolidated Financial Statements 31 March 2025 ‐ Unaudited 12
===== SIDA 16 =====
Kvika banki hf. Amounts are in ISK thousands
Notes to the Condensed Interim Consolidated Financial Statements
0
Segment information
4. Business segments
‐
‐
‐
‐
‐
Asset Commercial Investment UK Supporting
3m 2025 Management Banking Banking operations Treasury units Total
(419) 1,176,890 570,032 534,753 642,972 (7,723) 2,916,505
613,870 360,855 542,850 133,231 47,399 (178,041) 1,520,163
18,942 749 (25,253) 123,821 (166,010) ‐ (47,751)
2,562 51,476 ‐ 7,055 ‐ (1,388) 59,705
Net operating income 634,955 1,589,969 1,087,629 798,860 524,362 (187,153) 4,448,622
(276,954) (240,902) (217,314) (196,486) (64,137) (707,702) (1,703,496)
(32,313) (525,046) (54,541) (103,745) (19,128) (651,472) (1,386,244)
Administrative expenses (309,267) (765,948) (271,855) (300,231) (83,265) (1,359,174) (3,089,740)
‐ (42,401) (12,873) (10,173) (14) ‐ (65,461)
(12,334) ‐‐ (580,339) ‐‐
(592,673)
(172,015) (370,104) (220,244) (51,540) (87,782) 901,684 ‐
Profit (loss) before tax from continuing operations 141,340 411,516 582,657 (143,423) 353,300 (644,643) 700,748
Net segment revenue from external
641,232 38,162 1,873,058 1,163,214 675,809 57,147 4,448,622
Net segment revenue from other
(6,276) 1,551,808 (785,430) (364,354) (151,448) (244,300) ‐
customers .............................................................
segments ..............................................................
Cost allocation ........................................................
Supporting units consist of the functions carried out by the Bank's support divisions, such as Risk Management, Finance, IT and Operations, etc. The
information presented relating to the supporting units does not represent an operating segment.
Net interest income ................................................
Net fee and commission income ............................
Net financial (expense) income ..............................
Other operating income .........................................
Salaries and related expenses ................................
Other operating expenses ......................................
Net impairment .......................................................
Revaluation of contingent consideration ...............
Commercial Banking offers various forms of banking services and related advisory services. Included in this operating segment is Lykill, the
leasing operations of the Group, and the Group's fintech operations, such as Auður, Netgíró and Aur, as well as the payment facilitation
operations of Straumur greiðslumiðlun hf.
Investment Banking
Investment Banking provide a range of professional services in the fields of specialised financing, securities and foreign exchange transactions
and corporate finance services.
UK operations
The UK operations consist of asset management and corporate finance services through Kvika Securities Ltd. and specialised lending services
through Ortus Secured Finance Ltd. UK operations is the only geographic area outside of Iceland where the Group operates and for the period in
2025
it accounted for 18.0% (Q1 2024: 15.3%) of net operating income.
Segment reporting is based on the same principles and structure as internal reporting to the CEO and the Board of Directors. Segment performance
is evaluated on profit before tax and excludes income from discontinued operations.
Reportable segments
Asset Management
Products and services offered include asset management involving both domestic and foreign assets, private banking and private pension plans.
The management of a broad range of mutual funds, investment funds and institutional investor funds is included in this segment through the
operations of Kvika eignastýring hf.
Commercial Banking
During the period in 2025, the Group defined the following reportable operating segments; Asset Management, Commercial Banking, Investment
Banking, UK operations and Treasury. Treasury, which was previously r eported as part of Investment Banking, is now presented separately.
Operating segments pay and receive interest to and from Treasury on an arm's length basis to reflect the allocation of capital and funding cost.
During the period in 2025, the Group implemented the change that operating segments would receive interest from Treasury to reflect the
allocation of capital. Comparative figures have been restated, as applicable.
Treasury
Treasury is responsible for the Bank's funding, liquidity and asset ‐and‐liability management. Treasury oversees the internal fund‘s transfer
pricing and manages the relationship with investors, credit rating agencies and financial institutions. Market making activities in domestic
securities sit within Treasury.
Condensed Interim Consolidated Financial Statements 31 March 2025 ‐ Unaudited 13
===== SIDA 17 =====
Kvika banki hf. Amounts are in ISK thousands
Notes to the Condensed Interim Consolidated Financial Statements
0
4. Business segments (cont.)
Asset Commercial Investment UK Supporting
3m 2024 Management Banking Banking operations Treasury units Total
(6,523) 1,228,754 484,949 423,911 205,126 (10,100) 2,326,118
633,387 344,797 438,725 196,981 13,905 5,105 1,632,900
27,615 2,352 (11,325) (1,179) 6,359 ‐ 23,822
(285) 80,596 ‐ 3,760 ‐ 1,640 85,711
Net operating income 654,577 1,656,308 912,347 623,474 225,391 (3,547) 4,068,550
(247,327) (224,260) (188,277) (173,340) (60,497) (730,480) (1,624,180)
(37,021) (400,791) (45,817) (102,666) (27,299) (428,023) (1,041,616)
Administrative expenses (284,348) (625,051) (234,093) (276,006) (87,796) (1,158,503) (2,665,797)
‐ (80,245) (69,053) (37,920) (731) ‐ (187,950)
‐‐‐‐‐‐‐
(210,615) (441,481) (242,794) (52,089) (99,786) 1,046,765 ‐
Profit (loss) before tax from continuing operations 159,614 509,531 366,406 257,459 37,079 (115,285) 1,214,804
Net segment revenue from external
666,653 165,965 1,989,071 1,011,049 239,359 (3,547) 4,068,550
Net segment revenue from other
(12,076) 1,490,343 (1,076,725) (387,575) (13,967) ‐‐
Net interest income ................................................
Net fee and commission income ............................
Net financial income ...............................................
customers .............................................................
segments ..............................................................
Other operating income .........................................
Salaries and related expenses ................................
Other operating expenses ......................................
Net impairment .......................................................
Revaluation of contingent consideration ...............
Cost allocation ........................................................
Condensed Interim Consolidated Financial Statements 31 March 2025 ‐ Unaudited 14
===== SIDA 18 =====
Kvika banki hf. Amounts are in ISK thousands
Notes to the Condensed Interim Consolidated Financial Statements
4
Income statement
5. Net interest income
Interest income is specified as follows:
3m 2025 3m 2024
591,003 203,642
110,524 35,669
4,993,796 4,909,331
563,135 1,005,486
1,041,724 951,333
182 330
Total 7,300,364 7,105,791
Interest expense is specified as follows:
3m 2025 3m 2024
2,651,080 2,634,755
607,430 539,834
683,748 865,307
137,884 183,137
291,097 538,165
12,621 18,474
Total 4,383,859 4,779,672
Net interest income 2,916,505 2,326,118
6. Net fee and commission income
3m 2025 3m 2024
621,785 609,600
333,912 448,207
116,704 137,061
459,331 539,453
137,693 61,109
Total fee and commission income 1,669,424 1,795,429
(149,261) (162,530)
Net fee and commission income 1,520,163 1,632,900
Asset management fees are earned by the Group for trust and fiduciary activities where the Group holds or invests assets on behalf of the
customers.
Fee and commission income from capital markets and corporate finance include fees and commissions generated by miscellaneous corporate
finance service, securities, derivatives and FX brokerage as well as market making.
Fee and commission income from cards and payment solutions relate to the Group's payment facilitations services as well as the issuance of debit
and credit cards.
Fee and commission income from loans and guarantees include the Group's lending operations, notification and collection fees, as well as fees
from issuing guarantees.
Asset Management ..............................................................................................................................................................
Capital markets and corporate finance ...............................................................................................................................
Cards and payment solutions ..............................................................................................................................................
Loans and guarantees ..........................................................................................................................................................
Other interest expense* ......................................................................................................................................................
Issued bonds ........................................................................................................................................................................
Derivatives ............................................................................................................................................................................
* Thereof are lease liabilities' interest expense amounting to ISK 10 million (3m 2024: ISK 13 million).
Deposits ...............................................................................................................................................................................
Other fee and commission income ......................................................................................................................................
Fee and commission expense ..............................................................................................................................................
Cash and balances with Central Bank ..................................................................................................................................
Derivatives ............................................................................................................................................................................
Loans to customers ..............................................................................................................................................................
Other interest income ..........................................................................................................................................................
Fixed income securities (FVOCI) ...........................................................................................................................................
Loans to credit institutions ..................................................................................................................................................
Fee and commission income is disclosed based on the nature and type of income generated across business segments. Information on net fee and
commission income by segment is disclosed in note 4.
Borrowings ...........................................................................................................................................................................
Subordinated liabilities ........................................................................................................................................................
Total interest income recognised in respect of financial assets not carried at fair value through profit or loss amounts to ISK 5,655 million (3m 2024:
ISK 5,106 million). Total interest expense recognised in respect of financial liabilities not carried at fair value through profit or loss amounts to ISK
4,093 million (3m 2024: ISK 4,242 million).
Condensed Interim Consolidated Financial Statements 31 March 2025 ‐ Unaudited 15
===== SIDA 19 =====
Kvika banki hf. Amounts are in ISK thousands
Notes to the Condensed Interim Consolidated Financial Statements
4
7. Net financial (expense) income
Net financial (expense) income is specified as follows:
3m 2025 3m 2024
Net (loss) gain on financial assets and financial liabilities mandatorily measured at fair value through profit or loss
80,913 84,126
(31,162) (61)
67,936 (74,989)
(4,921) (22,728)
(21,435) 21,407
(83,423) 0
(55,660) 16,066
Total (47,751) 23,822
8. Foreign currency exchange difference
Foreign currency exchange difference is specified as follows:
3m 2025 3m 2024
1,117,769 (664,278)
(1,173,428) 680,344
Total (55,660) 16,066
9. Administrative expenses
Administrative expenses are specified as follows:
3m 2025 3m 2024
1,703,496 1,624,180
906,231 771,638
392,899 216,153
87,114 53,826
Total 3,089,740 2,665,797
10. Salaries and related expenses
Salaries and related expenses are specified as follows:
3m 2025 3m 2024
1,230,238 1,200,913
125,057 84,041
0 7,103
161,615 149,437
65,105 63,781
121,481 118,905
Total 1,703,496 1,624,180
252 249
253 249
11.
3m 2025 3m 2024
(69,658) (186,448)
(3) 0
4,200 (1,502)
Total (65,461) (187,950)
12. Revaluation of contingent consideration
Net change in impairment of loans .....................................................................................................................................
In March 2025, the Group completed the expedited acquisition of the remaining management shares in Ortus Secured Finance ltd. (OSF), originally
scheduled to be acquired over a five ‐year period (2024–2028) with pricing linked to OSF’s a nnual performance . An expense of ISK 580 million was
incurred during the period in 2025 related to the expedited acquisition of the OSF shares.
Average number of full time employees during the period ................................................................................................
Total number of full time employees at the end of the period ...........................................................................................
Salaries and related expenses ..............................................................................................................................................
Other operating expenses ....................................................................................................................................................
Depreciation and amortisation ............................................................................................................................................
Depreciation of right of use asset ........................................................................................................................................
According to Act No. 165/2011, passed in 2011, banks and other financial institutions providing VAT exempt services, must pay a tax based on
salary payments, called tax on financial activity. The current tax rate is 5,50% (2024: 5,50%).
During the period in 2025, ISK 225 m illion in irregular and one ‐off costs were incurred by the Group, among other due to the finalisation of the
sale of TM. The espenses are included in all the line items in the table above except salaries and related expenses.
Net impairment
Net change in impairment of other assets ..........................................................................................................................
Net change in impairment of loan commitments, guarantees and unused credit facilities ...............................................
Other salary related expenses .............................................................................................................................................
Tax on financial activity ........................................................................................................................................................
Salaries .................................................................................................................................................................................
Performance based payments excluding share‐based payments .......................................................................................
(Loss) gain on other financial instruments ..........................................................................................................................
Share‐based payment expenses ..........................................................................................................................................
Pension fund contributions ..................................................................................................................................................
Loss on prepayments of borrowings ....................................................................................................................................
Foreign currency exchange difference ................................................................................................................................
Shares and other variable income securities ....................................................................................................................
Derivatives .........................................................................................................................................................................
Loans to customers ............................................................................................................................................................
Gain (loss) on financial instruments at fair value through profit and loss ..........................................................................
Fixed income securities .....................................................................................................................................................
Financial assets at fair value through OCI .........................................................................................................................
Condensed Interim Consolidated Financial Statements 31 March 2025 ‐ Unaudited 16
===== SIDA 20 =====
Kvika banki hf. Amounts are in ISK thousands
Notes to the Condensed Interim Consolidated Financial Statements
4
13. Income tax
14. Special tax on financial activity
15. Special tax on financial institutions
16. Earnings per share
3m 2025 3m 2024 3m 2025 3m 2024 3m 2025 3m 2024
Net earnings attributable to equity holders of the Bank 185,732 983,154 1,900,729 96,183 2,086,461 1,079,337
4,650,998 4,722,073 4,650,998 4,722,073 4,650,998 4,722,073
0 279 0 279 0 279
Total 4,650,998 4,722,353 4,650,998 4,722,353 4,650,998 4,722,353
0.04 0.21 0.41 0.02 0.45 0.23
0.04 0.21 0.41 0.02 0.45 0.23
Continuing and
discontinued operations
The Bank and some of its subsidiaries will not pay income tax on its profit for 2025 due to the fact that Group has a tax loss carry forward that
offsets the calculated income tax. At year ‐end 2024, the tax loss carry forward of the Group amounted to ISK 9.7 b illion. A substantial part of the
tax loss carry forward is utilisable until end of year 2028. Management is of the opinion that the Group's operations in the years to come will result
in taxable results which will be offset with the tax loss carry forward. The Group has therefore recognised the tax loss carry forward as a deferred
tax asset in the consolidated statement of financial position.
The calculation of basic earnings per share is based on earnings attributable to shareholders and a weighted average number of shares
outstanding during the period. The diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares
outstanding to assume conversion of all dilutive potential ordinary shares. The Bank has issued stock options that have a dilutive effect.
According to Act No. 155/2010 on Special Tax on Financial Institutions, certain types of financial institutions, including banks, must pay a nnually a
tax based on the carrying amount of their liabilities as determined for tax purposes in excess of ISK 50 billion at year ‐end. The tax rate is set at
0,145% (2024: 0,145%) and the tax is not a deductible expense for income tax purposes. The tax is presented separately in the consolidated
income statement.
The special tax on financial activity is an additional income tax which becomes effective when the income tax base exceeds ISK 1,000 million. It is
levied on the same entities as the tax on financial activity according to Act No. 90/2003. The tax rate is set at 6,0% (2024: 6,0%) and the tax is not a
deductible expense
for income tax purposes. The tax is presented separately in the consolidated income statement.
Income tax is recognised based on the tax rates and tax laws enacted during the current year, according to which the domestic corporate income
tax rate was 20.0% (2024: 21.0%). Companies within the Group, which operate outside of Iceland, recognise income tax in accordance with the
applicable tax laws in the country they reside.
Discontinued
operations
Weighted average number of outstanding shares .................................
Adjustments for stock options ................................................................
Basic earnings per share (ISK) .................................................................
Diluted earnings per share (ISK) .............................................................
Continuing operations
Condensed Interim Consolidated Financial Statements 31 March 2025 ‐ Unaudited 17
===== SIDA 21 =====
Kvika banki hf. Amounts are in ISK thousands
Notes to the Condensed Interim Consolidated Financial Statements
16
Statement of Financial Position
17. Cash and balances with Central Bank
Cash and balances with Central Bank are specified as follows:
31.3.2025 31.12.2024
38,144,567 12,758,682
19,365 15,737
Included in cash and cash equivalents 38,163,932 12,774,419
5,745,226 5,819,001
Total 43,909,157 18,593,420
18. Loans to credit institutions
Loans to credit institutions are specified as follows:
31.3.2025 31.12.2024
14,720,164 9,725,772
8,052,844 0
1,308,293 1,803,799
Total 24,081,301 11,529,571
19. Loans to customers
Gross Gross Gross
carrying Book carrying Book carrying Book
31.3.2025 amount value amount value amount value
40,451,707 39,580,912 121,516,685 120,120,359 161,968,392 159,701,271
0 0 881,561 881,561 881,561 881,561
Total 40,451,707 39,580,912 122,398,245 121,001,919 162,849,952 160,582,831
Gross Gross Gross
carrying Book carrying Book carrying Book
31.12.2024 amount value amount value amount value
40,608,567 39,736,334 111,047,378 109,592,569 151,655,945 149,328,903
0 0 873,794 873,794 873,794 873,794
Total 40,608,567 39,736,334 111,921,172 110,466,363 152,529,739 150,202,696
20. Fixed income securities
Fixed income securities are specified as follows:
Mandatorily measured at fair value through profit or loss 31.3.2025 31.12.2024
1,085,653 2,713,853
2,343,177 2,189,075
824,248 722,405
Measured at fair value through other comprehensive income
52,372,355 54,256,365
4,059,755 3,453,441
1,479,961 1,459,422
Total 62,165,150 64,794,561
TotalIndividuals
Total
Corporates
Loans to customers at amortised cost ..................
The breakdown of the loan portfolio by individuals and corporates is specified as follows:
Listed government bonds and bonds with government guarantees ........................................................................
Listed treasury bills ....................................................................................................................................................
Listed bonds ..............................................................................................................................................................
Deposits with Central Bank ..........................................................................................................................................
Cash on hand ................................................................................................................................................................
Loans to customers at FV through profit or loss ...
Restricted balances with Central Bank ‐ fixed reserve requirement ...........................................................................
Listed government bonds and bonds with government guarantees ........................................................................
Listed bonds ..............................................................................................................................................................
Unlisted bonds ..........................................................................................................................................................
CorporatesIndividuals
The Group presents finance lease receivables as part of loans to customers at amortised cost. As at 31 March 2025, the book value of finance lease
receivables amounted to ISK 22,891 million (31.12.2024: ISK 22,866 million).
Loans to customers at FV through profit or loss ...
Loans to customers at amortised cost ..................
Bank accounts ..............................................................................................................................................................
Money market loans ....................................................................................................................................................
Other loans ...................................................................................................................................................................
Condensed Interim Consolidated Financial Statements 31 March 2025 ‐ Unaudited 18
===== SIDA 22 =====
Kvika banki hf. Amounts are in ISK thousands
Notes to the Condensed Interim Consolidated Financial Statements
16
21. Shares and other variable income securities
Shares and other variable income securities are specified as follows:
Mandatorily measured at fair value through profit or loss 31.3.2025 31.12.2024
1,285,145 1,100,609
2,704,521 3,069,376
1,613,129 1,262,269
Total 5,602,795 5,432,254
22. Securities used for hedging
Securities used for hedging are specified as follows:
31.3.2025 31.12.2024
2,193,777 1,904,937
377,797 584,432
6,135,116 9,669,279
13,259 0
115,875 442,377
Total 8,835,823 12,601,026
23. Derivatives
31.3.2025 Assets Liabilities Assets Liabilities
135,225 89,630 44,213 0
31,139,911 23,398,318 443,671 110,000
29,310,333 28,998,759 617,538 306,022
0 7,405,760 80,880 0
12,804,615 11,648,418 1,386,298 230,674
Total 73,390,083 71,540,885 2,572,600 646,696
31.12.2024 Assets Liabilities Assets Liabilities
159,361 107,143 55,954 0
34,754,643 35,671,836 455,496 1,321,348
13,022,277 13,000,436 40,291 18,480
0 7,386,404 0 282,967
13,586,028 14,533,627 645,003 1,309,635
Total 61,522,310 70,699,445 1,196,744 2,932,429
31.3.2025 31.12.2024
(21,310) (52,556)
107,518 39,057
(21,504) (7,811)
Total 64,704 (21,310)
Currency forwards used for hedge accounting ...................................................
Cross ‐ currency interest rate swaps ...................................................................
Currency forwards used for hedge accounting ...................................................
Unlisted unit shares ...................................................................................................................................................
Foreign currency revaluation of the net foreign operations .......................................................................................
Tax effect ......................................................................................................................................................................
Cross ‐ currency interest rate swaps ...................................................................
Listed shares .................................................................................................................................................................
Bond and equity total return swaps ...................................................................
Derivatives are specified as follows:
Currency forwards ...............................................................................................
Interest rate derivatives ......................................................................................
Listed shares ..............................................................................................................................................................
Unlisted unit shares .....................................................................................................................................................
Listed government bonds and bonds with government guarantees ..........................................................................
Listed unit shares .........................................................................................................................................................
Listed bonds .................................................................................................................................................................
Unlisted shares ..........................................................................................................................................................
Carrying amount
Bond and equity total return swaps ...................................................................
Notional
The hedging gain recognised in OCI before tax is equal to the change in fair value used for measuring effectiveness. There is no ineffectiveness
recognised in profit or loss.
Set out below is the reconciliation of foreign currency translation reserve component of equity due to hedge accounting and the analysis of other
comprehensive income:
Currency forwards ...............................................................................................
Interest rate derivatives ......................................................................................
Notional Carrying amount
Balance at the beginning of the year ...........................................................................................................................
Condensed Interim Consolidated Financial Statements 31 March 2025 ‐ Unaudited 19
===== SIDA 23 =====
Kvika banki hf. Amounts are in ISK thousands
Notes to the Condensed Interim Consolidated Financial Statements
16
24. Group entities
Share Share
Entity Nature of operations Domicile 31.3.2025 31.12.2024
Holding company Iceland 100% 100%
Asset management Iceland 100% 100%
Debt Collection Iceland 100% 100%
Iceland 100% 100%
Insurance company Iceland ‐ 100%
Insurance company Iceland ‐ 100%
Iceland 85% 85%
UK 100% 100%
UK 100% 80%
25. Investment in associates
a. Investment in associates is accounted for using the equity method and is specified as follows:
Share Share
Entity Nature of operations Domicile 31.3.2025 31.12.2024
Iceland 24% 24%
Croatia 40% 40%
b. Changes in investments in associates are specified as follows: 31.3.2025 31.12.2024
112,855 96,194
0 (19,806)
0 41,350
(941) (4,884)
Total 111,914 112,855
26. Intangible assets
a. Intangible assets are specified as follows: Customer Software
31.3.2025 Goodwill relationships Brands and other Total
17,783,902 1,567,131 218,952 2,123,415 21,693,400
0 0 0 69,878 69,878
0 (51,286) (11,384) (226,003) (288,673)
(25,953) (8,412) (210) 0 (34,575)
Balance as at 31 March 2025 17,757,949 1,507,434 207,358 1,967,289 21,440,029
17,757,949 2,089,232 369,316 4,043,969 24,260,465
0 (581,798) (161,958) (2,076,680) (2,820,435)
Balance as at 31 March 2025 17,757,949 1,507,434 207,358 1,967,289 21,440,029
Customer Software
31.12.2024 Goodwill relationships Brands and other Total
17,782,646 1,731,905 264,327 2,127,485 21,906,363
0 0 0 476,137 476,137
0 0 0 (3,973) (3,973)
0 (166,603) (45,805) (476,254) (688,662)
1,256 1,829 430 19 3,534
Balance as at 31 December 2024 17,783,902 1,567,131 218,952 2,123,415 21,693,400
17,783,902 2,097,644 369,526 4,021,898 24,272,969
0 (530,512) (150,573) (1,898,484) (2,579,569)
Balance as at 31 December 2024 17,783,902 1,567,131 218,952 2,123,415 21,693,400
TM tryggingar hf. ..................................................
The main subsidiaries held directly or indirectly by the Group are listed in the table below.
Gross carrying amount ................................................................
Accumulated amortisation and impairment losses ....................
Additions during the year ............................................................
Ortus Secured Finance ltd. ...................................
Fund management
TM líftryggingar hf. ...............................................
Payment facilitator
The sale of TM tryggingar hf. and TM líftryggingar hf. was concluded during the first quarter of 2025. Furthermore, during the same period the
Group acquired the remaining shares in Ortus Secured Finance ltd. Additionally, during the same period, one of the Group's subsidiary was
renamed from Kvika Securities ltd., to Kvika Limited.
Straumur greiðslumiðlun hf. ................................
Kvika Limited ........................................................
Lending operations
AC GP 3 ehf. ..........................................................
Skilum ehf. ............................................................
The Group does not consider its associates material, neither individually nor as a group.
Gláma fjárfestingar slhf. .......................................
Kvika eignastýring hf. ...........................................
GAMMA Capital Management hf.
........................
Moberg d. o. o. .....................................................
Business consultancy services
Holding company
Balance at the beginning of the year ...........................................................................................................................
Dividend received ........................................................................................................................................................
Share in profit of associates, net of income tax ..........................................................................................................
Currency adjustments .................................................................
Accumulated amortisation and impairment losses ....................
Digital solutions provider
Amortisation ................................................................................
Balance as at 1 January 2025 .......................................................
Exchange rate difference .............................................................................................................................................
Additions during the year ............................................................
Currency adjustments .................................................................
Gross carrying amount ................................................................
Amortisation ................................................................................
Discontinued ................................................................................
Balance as at 1 January 2024 .......................................................
Condensed Interim Consolidated Financial Statements 31 March 2025 ‐ Unaudited 20
===== SIDA 24 =====
Kvika banki hf. Amounts are in ISK thousands
Notes to the Condensed Interim Consolidated Financial Statements
16
27. Operating lease assets
Operating lease assets are specified as follows:
31.3.2025 31.12.2024
215,168 530,144
57,682 35,693
(36,695) (260,928)
(14,147) (89,741)
Total 222,008 215,168
378,281 465,429
(156,273) (250,261)
Total 222,008 215,168
28. Other assets
Other assets are specified as follows:
31.3.2025 31.12.2024
2,608,343 3,206,699
6,646,413 2,860,925
735,626 1,023,804
713,401 612,265
Total 10,703,784 7,703,693
Right of use asset and lease receivables are
specified as follows:
31.3.2025 31.12.2024
1,023,804 1,320,983
0 13,249
0 (14,968)
4,893 56,010
(1,146) 755
(200,688) 0
(91,237) (352,225)
Total 735,626 1,023,804
29. Borrowings
Borrowings are specified as follows:
31.3.2025 31.12.2024
13,604,494 13,809,473
311,034 580,042
Total 13,915,528 14,389,515
Impairment ..................................................................................................................................................................
The Group has not had any defaults of principal, interest or other breaches with respect to its debt issued and other borrowed funds.
Secured borrowings .....................................................................................................................................................
Other borrowings .........................................................................................................................................................
Accounts receivable .....................................................................................................................................................
Right of use asset and lease receivables as at 1 January .............................................................................................
Additions during the period .........................................................................................................................................
Sundry assets ...............................................................................................................................................................
Termination of lease agreements ................................................................................................................................
Currency adjustments ..................................................................................................................................................
Unsettled transactions .................................................................................................................................................
Right of use asset and lease receivables .....................................................................................................................
Indexation ....................................................................................................................................................................
Depreciation and lease receivable instalment ............................................................................................................
Right of use asset and lease receivables mostly consist of real estates for the Group's own use. The Group has entered into sublease contracts for
parts of the real estates which it does not use for its operations. The lease receivables are immaterial at period end. Lease liability is specified in
note 34.
Balance as at 1 January ................................................................................................................................................
Gross carrying amount .................................................................................................................................................
Additions ......................................................................................................................................................................
Disposals ......................................................................................................................................................................
Depreciation .................................................................................................................................................................
Accumulated depreciation ...........................................................................................................................................
Condensed Interim Consolidated Financial Statements 31 March 2025 ‐ Unaudited 21
===== SIDA 25 =====
Kvika banki hf. Amounts are in ISK thousands
Notes to the Condensed Interim Consolidated Financial Statements
16
30. Issued bonds
Issued bonds are specified as follows:
First Maturity
Currency, nominal value issued Maturity type Terms of interest 31.3.2025 31.12.2024
Unsecured bonds:
2022 2025 At maturity Floating, 3 month REIBOR + 1.25% 1,672,987 1,673,799
2023 2026 At maturity Floating, 3 month STIBOR + 4.10% 7,508,522 9,832,220
2023 2026 At maturity Floating, 3 month NIBOR + 4.10% 9,485,151 9,890,897
2023 2026 At maturity Floating, 3 month STIBOR + 4.0% 6,616,807 6,325,047
2021 2027 At maturity CPI‐indexed, fixed 1.0% 7,002,219 6,914,842
2025 2028 At maturity Floating, 3 month NIBOR + 0.2% 5,047,403 0
2025 2028 At maturity Floating, 3 month STIBOR + 0.2% 7,931,400 0
2022 2032 At maturity CPI‐indexed, fixed 1.40% 2,502,924 2,486,481
Total 47,767,413 37,123,285
31. Subordinated liabilities
a. Subordinated liabilities:
First Maturity
Currency, nominal value issued Maturity type Terms of interest 31.3.2025 31.12.2024
2023 2034 At maturity CPI ‐Indexed, fixed 6.25% 2,702,609 2,634,489
2015 2045 At maturity CPI ‐Indexed, fixed 5.25% 3,064,256 2,994,493
Total 5,766,866 5,628,982
b. Subordinated liabilities are specified as follows:
31.3.2025 31.12.2024
5,628,982 5,993,084
0 (800,000)
0 500,000
0 (112,500)
0 (345,623)
137,884 394,021
Total 5,766,866 5,628,982
32. Short positions held for trading
Short positions held for trading are specified as follows:
31.3.2025 31.12.2024
415,354 127,976
105,932 25,025
Total 521,286 153,001
33. Short positions used for hedging
Short positions used for hedging are specified as follows:
31.3.2025 31.12.2024
4,789 0
0 42,035
Total 4,789 42,035
Paid interest .................................................................................................................................................................
Paid interests due to indexation ..................................................................................................................................
Accrued interests and indexation ................................................................................................................................
Redemption of KVB 18 02 ............................................................................................................................................
Additions ......................................................................................................................................................................
KVIKA 25 1201 GB ISK 1,660 million .
EMTN 28 0421, SEK 600 million .......
At the interest payment date in May 2025 for TM 15 01, the a nnual interest rate increases from 5.25% p.a. to 6.25% p.a. At the interest payment
date in May 2025 for TM 15 01, the Group has the right to repay the subordinated bond and on any subsequent interest payment dates until
maturity.
At the interest payment date in the year 2029 for KVIKA 34 1211 T2i, the Group has the right to repay the subordinated bond and on any
EMTN 26 0511, SEK 566 million * ....
EMTN 26 0511, NOK 750 million * ...
EMTN 26 1123 GB, SEK 500 m. .........
Listed government bonds and bonds with government guarantees ..........................................................................
Balance at the beginning of the year ...........................................................................................................................
Subordinated liabilities are financial liabilities in the form of subordinated capital which, in case of the Group's voluntary or compulsory windin g‐
up, will not be repaid until after the claims of ordinary creditors have been met. In the calculation of the capital ratio, they are included within Tier
2 and are a part of the equity base. The amount eligible for Tier 2 capital treatment is amortised on a straight ‐line basis over the final 5 years to
maturity or
up to 20% a year. The Group may only retire subordinated liabilities with the permission of the FME.
KVIKA 34 1211 T2i, ISK 2,500 m. .......
* Bond issued in two tranches, first tranche SEK 275 million was issued in May 2023 at a spread of STIBOR + 410 bps, the second tranche amounting
to SEK 500 million was issued in May 2024 at a price corresponding to a spread of STIBOR + 240 bps. In January 2025, concurrent with an offering of
new bonds in SEK/NOK, Kvika offered to buy back bonds issued by the bank in SEK with a maturity date 11 May 2026 a n di nN O Kw i t ham a t u r i t y
date of 11 May 2026. The bank received valid tenders of SEK 209 million and NOK 50 million which were all accepted.
EMTN 28 0421, NOK 400 million ......
Listed government bonds and bonds with government guarantees ..........................................................................
Listed bonds .................................................................................................................................................................
TM 15 1, ISK 2,000 million ................
KVIKA 32 0112, ISK 2,000 million .....
KVB 21 02, ISK 5,400 million ............
Listed bonds .................................................................................................................................................................
Condensed Interim Consolidated Financial Statements 31 March 2025 ‐ Unaudited 22
===== SIDA 26 =====
Kvika banki hf. Amounts are in ISK thousands
Notes to the Condensed Interim Consolidated Financial Statements
16
34. Other liabilities
Other liabilities are specified as follows:
31.3.2025 31.12.2024
23,135,160 0
5,385,186 7,531,359
4,969,648 1,565,311
1,166,584 1,259,035
1,060,703 1,158,332
1,169,826 1,110,946
380,399 376,753
667,859 319,660
13,481 17,681
270,255 295,828
Total 38,219,103 13,634,905
Lease liability is specified as follows:
31.3.2025 31.12.2024
1,158,332 1,510,333
0 13,249
0 (14,629)
(2,107) 1,861
(100,415) (408,492)
4,893 56,010
Total 1,060,703 1,158,332
35. Share capital
a. Share capital
31.3.2025 31.12.2024
4,722,073 4,722,073
110,541 61,893
240,000 310,000
b. Changes made to the nominal amount of share capital
c. Share capital increase authorisations
Nominal amount of treasury shares ............................................................................................................................
The nominal value of shares issued by the Bank is ISK 1 per share. All currently issued shares are fully paid. The holders of shares are entitled to
receive dividends as approved by the general meeting and are entitled to o ne vote per nominal value of ISK 1 at s hareholders' meetings. Reference
is made to the Bank's Articles of Association for more information about the share capital.
Currency adjustments ..................................................................................................................................................
Special taxes on financial institutions and financial activities ....................................................................................
Termination of lease agreements ................................................................................................................................
A copy of the Bank's Articles of Association, including the temporary prov isions, is available on the Bank's website, www.kvika.is, reference is mad e
to them for more information.
Additions during the period .........................................................................................................................................
Instalment ....................................................................................................................................................................
Contingent consideration ............................................................................................................................................
The lease liability mostly consists of real estate for the Group's own use. The end date of the lease agreement of the Group's head office is in
November 2031 but with an exit clause in September 2027. The lease is linked to the Icelandic consumer price index. Right of use asset and lease
receivables are specified in note 28.
Unsettled transactions .................................................................................................................................................
Withholding taxes ........................................................................................................................................................
According to the Bank's Articles of Association dated 26 March 2025, cf. temporary provision I, the Board of Directors is authorised to issue options
or warrants for up to ISK 240 million in nominal value. To serve such instruments the Board of Directors is authorised to either increase the share
capital accordingly or purchase own shares,
as permitted by law. This authorisation is valid until 31 March 2027.
Unpaid dividend ...........................................................................................................................................................
During the period in 2025, the Bank acquired treasury shares amounting to ISK 49 million in nominal value as a result of a share buy‐back plan.
Accounts payable and accrued expenses ....................................................................................................................
Lease liability ................................................................................................................................................................
Salaries and salary related expenses ...........................................................................................................................
Share capital according to the Bank's Articles of Association .....................................................................................
Indexation ....................................................................................................................................................................
Expected credit loss allowance for loan commitments, guarantees and unused credit facilities ..............................
Authorised but not issued shares ................................................................................................................................
Lease liability as at 1 January .......................................................................................................................................
Other liabilities .............................................................................................................................................................
Condensed Interim Consolidated Financial Statements 31 March 2025 ‐ Unaudited 23
===== SIDA 27 =====
Kvika banki hf. Amounts are in ISK thousands
Notes to the Condensed Interim Consolidated Financial Statements
16
36. Capital adequacy ratio (CAR)
Own funds 31.3.2025 31.12.2024
67,598,888 89,517,287
(2,086,461) 0
(70,801) 0
(4,089,394) (2,050,479)
(21,440,029) (28,827,742)
(266,994) (23,499,576)
(1,819,615) (2,273,265)
2,086,609 5,800,889
Common equity Tier 1 capital (CET 1) 39,912,203 38,667,113
5,659,216 5,600,973
Total own funds 45,571,418 44,268,087
Risk‐weighted exposure amount (RWEA)
161,693,061 158,177,636
8,035,663 7,586,080
28,080,116 28,080,116
Total risk‐weighted exposure amount 197,808,840 193,843,832
Capital ratios
20.2% 19.9%
20.2% 19.9%
23.0% 22.8%
47,207,066
21.0%
21.0%
23.9%
Capital buffer requirement, % of RWEA
1.5% 1.5%
2.4% 2.4%
2.5% 2.5%
Combined buffer requirement 6.4% 6.4%
Capital requirement, % of RWEA 31.3.2025
CET1 Tier 1T o t a l
4.5% 6.0% 8.0%
2.0% 2.7% 3.6%
Minimum requirement under Pilar I and Pillar II‐R 6.5% 8.7% 11.6%
6.4% 6.4% 6.4%
Total capital reqiurement 12.9% 15.1% 18.0%
The Group has updated its disclosure of the capital adequacy ratio and the key components in order to provide more information. As a part of this
some comparative figures for 31 December 2024 have been restated, although the total figure for common equity Tier 1 capital (CET 1) remains the
same. Those line items are marked with an asterisk (*).
Pillar I capital requirement .............................................................................................................
Pillar II‐R capital requirement ........................................................................................................
Combined buffer requirement .......................................................................................................
T1 ratio .........................................................................................................................................................................
T1 ratio including unaudited (positive) retained earnings and expected dividends ...................................................
System risk buffer (SRB) ...............................................................................................................................................
Countercyclical capital buffer (CCyB) ...........................................................................................................................
Capital conservation buffer (CCB) ................................................................................................................................
Goodwill and intangibles .............................................................................................................................................
Other unaudited (positive) changes to total equity in current period ........................................................................
Unaudited retained (positive) earnings from current period ......................................................................................
The capital adequacy ratio of the Group is calculated in accordance with capital requirements regulation no. 575/2013 as implemented through
the Act on Financial Undertakings No. 161/2002. The Bank's regulatory capital calculations for credit risk and market risk are based on the
standardised approach and the capital calculations for operational risk are based on the basic indicator approach.
Proposed dividends and buybacks ..............................................................................................................................
Shares in other financial institutions * ........................................................................................................................
CET1 ratio .....................................................................................................................................................................
Capital adequacy ratio (CAR) including unaudited (positive) retained earnings and expected dividends .................
Credit risk .....................................................................................................................................................................
Total own funds including unaudited (positive) retained earnings and expected dividends .....................................
Operational risk ............................................................................................................................................................
Total equity ..................................................................................................................................................................
Market risk ...................................................................................................................................................................
Tier 2 capital .................................................................................................................................................................
Amounts below the threshold for deduction * ...........................................................................................................
Capital adequacy ratio (CAR) .......................................................................................................................................
CET1 ratio including unaudited (positive) retained earnings and expected dividends ..............................................
Deferred tax asset * .....................................................................................................................................................
Condensed Interim Consolidated Financial Statements 31 March 2025 ‐ Unaudited 24
===== SIDA 28 =====
Kvika banki hf. Amounts are in ISK thousands
Notes to the Condensed Interim Consolidated Financial Statements
16
37. Leverage ratio
31.3.2025 31.12.2024
290,627,473 253,116,968
3,811,336 2,533,012
527,294 800,313
Total exposure measure 294,966,103 256,450,293
39,912,203 38,667,113
13.5% 15.1%
38. Minimum requirements for own funds and eligible liabilities (MREL)
Own funds and eligible liabilities 31.3.2025 31.12.2024
39,912,203 38,667,113
5,659,216 5,600,973
46,094,426 35,449,487
Total own funds and eligible liabilities 91,665,845 79,717,574
MREL‐RWEA and CBR
197,808,840 193,843,833
46.3% 41.1%
22.0% 22.0%
6.4% 6.4%
MREL‐RWEA requirement including CBR* 28.4% 28.4%
MREL‐TEM
294,966,103 256,450,293
31.1% 31.1%
6.0% 6.0%
*Requirements were first set in January 2025
On‐balance sheet exposures .......................................................................................................................................
Derivative exposures ....................................................................................................................................................
Off ‐ balance sheet exposures .....................................................................................................................................
The leverage ratio is calculated on the basis of the Group's consolidated numbers as per regulation no. 575/2013 of the EU, which excludes the
Group's insurance subsidiary. According to Act no. 161/2002 on Financial Undertakings the minimum leverage ratio requirement is 3%.
MREL‐TEM requirement* ............................................................................................................................................
The Central Bank of Iceland's Resolution Authority presented the Group their first minimum requirement for own funds and eligible liabilities
(MREL) in January 2025. According to Act No. 70/2020 on Resolution of Credit Institutions and Investment Firms, the Bank shall at all times meet
the MREL funds as a percentage to the Group's total risk ‐weighted exposure amount (MREL ‐RWEA). The MREL
‐RWEA requirement must be met
parallel to the combined buffer requirement (CBR). The Group must also meet a requirement of MREL funds as a percentage of the Group's total
exposure measure (MREL ‐TEM). The decision of the Resolution Authority entails that the Bank must at all times maintain a minimum of 22% of
MREL‐RWEA and 6% of MREL‐TEM.
Leverage ratio ..............................................................................................................................................................
Tier 1 capital .................................................................................................................................................................
Total exposure measure ..............................................................................................................................................
Own funds and eligible liabilities as % of TEM ............................................................................................................
Common equity Tier 1 capital (CET 1) ..........................................................................................................................
Tier 2 capital .................................................................................................................................................................
Minimum requirements for own funds (MREL)*
........................................................................................................
Combined buffer requirement (CBR) ...........................................................................................................................
Own funds and eligible liabilities as % of RWEA ..........................................................................................................
Eligible liabilities ..........................................................................................................................................................
Risk‐weighted exposure amount (RWEA) ....................................................................................................................
Condensed Interim Consolidated Financial Statements 31 March 2025 ‐ Unaudited 25
===== SIDA 29 =====
Kvika banki hf. Amounts are in ISK thousands
Notes to the Condensed Interim Consolidated Financial Statements
38
Risk management
39. Hedging
40. Credit risk ‐ overview
a. Definition
b. Management
c. Credit approval process
d. Collateral
e. Credit rating, control and provisioning
f. Loan portfolio management
g. Impairment
h. Derivatives
i. Securities used for hedging
The Group offers derivative contracts in the form of swap contracts on highly liquid securities or currencies. On the day when the contract is
entered into, the Group purchases the underlying asset and hedges its exposure to price changes. Collateral is primarily in the form of cash or
listed, highly liquid securities. The risk management unit and ALCO set rules about the level of collateralisation and the risk management unit
monitors the compliance to these rules. Contracts are closed if required levels of collateralisation are not met.
The Group hedges itself for market risk of derivative contracts by purchasing the underlying securities at the commencement of the contract.
Since the contracts require delivery of the underlying securities to the customer on the settlement day, the credit risk towards the issuer is
immaterial.
To ensure an effective diversification of the loan portfolio the board has set a limit framework defining maximum exposure as a ratio of the
Group’s equity and/or the total size of the loan portfolio. These limits include limitation on joint exposure to associated clients, exposure to
individual and associated industries, single regions and countries etc. It is the responsibility of risk management to monitor that these limits are
not being violated and to report discrepancies to the credit committee.
One of the Group's primary sources of risk is credit risk. Credit risk is defined as the risk that one party to a financial instrument will cause a
financial loss for the
other party by failing to discharge an obligation.
The risk management unit monitors credit risk and is responsible for developing methodologies to systematically identify, assess, monitor, and
manage it. The Group uses a variety of tools and processes to manage credit risk, including collaterals, hedges and loan portfolio management.
To a very large extent the Group's loan portfolio consists of senior loans, most of which are highly collateralised.
Securing loans with collateral is a traditional method to reduce credit risk. The Group uses different methods to reduce credit risk by obtaining
collateral from customers where appropriate. Such collateral gives the Group right to the collateralised assets for current and future obligations
incurred by
the customer.
The Group applies appropriate haircuts on all collateral in order to ensure proper risk mitigation. For all collateral in listed securities, the Grou p
maintains the right to liquidate collateral in case its market value falls below a predefined limit.
The risk management unit ensures that loans have a credit rating and is responsible for reviewing the loan portfolio. The Group monitors the
value of collateral by listed securities on a real time basis and takes prompt action when necessary.
The originating department prepares a proposal for each larger loan or credit line which is presented to the credit committee for approval. The
proposal consists of a basic description of the client, the purpose of the loan, a simple credit assessment and arguments for or against granting
the loan. The committee decides whether there is need for further cred it assessment and on what terms the loan may be granted. For smaller
loans the originating department obtains a general credit approval from the credit committee with respect to the process, terms, credit limits and
total amount of the specific lending type.
A more thorough credit assessment may be conducted if considered appropriate and can include an assessment of a borrower's fundamental
credit strength as well as the value of any collateral. To assess the borrower's capacity to meet his or her obligations the committee can request
stress test analysis of the borrower's
cash flow or call for third party assessments.
Provisioning for loan impairments is estimated on the basis of expected loss models assessing the portfolio as a whole as well as individual
lending. Risk management unit suggest a level of provisioning for the portfolio, based on the expected loss assessment. Risk management unit
reassess impairments in the event of collateral decay, delayed payments, indication of increased risk, or other early warning signs. Provisions
require approval from the credit committee. Refer to note 11 in the financial statements for more information on the Group's impairment policy.
Securities held as a hedge against derivatives positions of customers make up a part of the Group's portfolio of assets. The Group hedges
currency exposure between the Group's asset portfolio and its liabilities to the extent possible as part of managing its balance and keeping it
within approved limits. The Group applies hedge accounting according to IAS 39 against translation of foreign operations. Currency swap
agreements are used as a hedge instrument against translation difference arising from foreign operations.
Condensed Interim Consolidated Financial Statements 31 March 2025 ‐ Unaudited 26
===== SIDA 30 =====
Kvika banki hf. Amounts are in ISK thousands
Notes to the Condensed Interim Consolidated Financial Statements
40
41. Maximum exposure to credit risk
31.3.2025 Public Financial Corporate
On‐balance sheet exposure entities institutions customers Individuals 31.3.2025
43,909,157 43,909,157
24,081,301 24,081,301
6,015 554 120,995,351 39,580,912 160,582,831
58,447,008 2,031,837 1,686,304 62,165,150
2,138,607 327,174 106,820 2,572,600
788 689,243 9,849,745 164,007 10,703,784
102,362,968 28,941,543 132,858,574 39,851,739 304,014,824
Off‐balance sheet exposure
7,183 5,328 6,719,760 827,010 7,559,281
529,662 529,662
Maximum exposure to credit risk 102,370,151 28,946,871 140,107,996 40,678,748 312,103,767
31.12.2024 Public Financial Corporate
On‐balance sheet exposure entities institutions customers Individuals 31.12.2024
18,593,420 18,593,420
11,529,571 11,529,571
6,972 1,665 110,457,726 39,736,334 150,202,696
62,660,260 1,888,815 245,486 64,794,561
1,000,775 144,011 51,958 1,196,744
549 1,114,688 5,423,117 141,535 6,679,889
81,261,202 15,535,514 116,270,340 39,929,827 252,996,882
Off‐balance sheet exposure
7,000 2,331 5,037,623 1,013,114 6,060,067
801,065 801,065
Maximum exposure to credit risk 81,268,202 15,537,845 122,109,027 40,942,941 259,858,014
42. Credit quality of financial assets
Model parameters for
Icelandic portfolio
Scenarios Base case Upside Downside Base case Upside Downside
Unemployment rate 4.2% 3.7% 4.9% 4.2% 3.7% 4.9%
Inflation CPI index 3.7% 3.4% 5.5% 3.7% 3.4% 5.5%
Assigned weight 50.0% 15.0% 35.0% 50.0% 15.0% 35.0%
Model parameters for UK
portfolio
Scenarios Base case Upside Downside Severe Base case Upside Downside Severe
Unemployment rate (2 years) 4.1% 3.9% 5.8% 7. 5% 4.1% 3.9% 5.8% 7.5%
Inflation CPI index (2 years) 5.0% 4.7% 8.3% 16. 4% 5.0% 4.7% 8.3% 16.4%
Assigned weight 50.0% 20.0% 25.0% 5. 0% 50.0% 20.0% 25.0% 5.0%
31.12.2024
Loan commitments ........................................................................................
Financial guarantee contracts .......................................................................
The book value of financial assets which fall under the impairment requirements of IFRS 9 are presented as net of expected credit losses ("ECL") in
the statement of financial position. The ECL are recalculated for each asset on at least a quarterly basis. The assessment of ECL is based on
calculations from PD, LGD and EAD models. Furthermore, the assessment is based upon management's assumptions regarding the development
of macroeconomic factors over the coming twelve months. The assumption s for macroeconomic development are decided for three scenarios: a
base case, an upside scenario, a downside scenario and for the UK portfolio there is a fourth scenario, severe downturn. Each scenario includes a
probability weight, and the ECL is derived as a weighted average. The amount of ECL to be recognized is dependent on the Group's definition of
significant increase in credit risk, which controls the impairment stage each asset is allocated to. The factors that are used to measure significant
increase in credit risk include comparison of changes in PD values, annualized lifetime PD values, days past due and watch list.
31.3.2025
31.3.2025 31.12.2024
Cash and balances with Central Bank ...........................................................
The maximum exposure to credit risk for on ‐balance sheet and off ‐balance sheet items, before taking into account any collateral held or other
credit enhancements, is specified as
follows:
Cash and balances with Central Bank ...........................................................
Loans to credit institutions ............................................................................
Fixed income securities .................................................................................
Loans to credit institutions ............................................................................
Fixed income securities .................................................................................
Loans to customers ........................................................................................
Derivatives .....................................................................................................
Other assets ...................................................................................................
Loan commitments ........................................................................................
Financial guarantee contracts .......................................................................
The Group utilises an economic forecast which is aligned with requirements for the calculation of expected credit loss. The Group owns loan
portfolios in two geographical segments, i.e. Iceland and the United Kingdom ("UK"). In general, the Group utilises the same ECL methodology for
the portfolios in both segments, although in the UK it is to a larger extent based on an individual assessment by credit specialists and a separate
macroeconomic forecast is used to reflect the UK economy. The following tables shows the first 12 month macro economic values for the
variables used in the expected credit loss model. For the UK portfolio 24 month values are used. Reference is made to note 82 in the 2024
Consolidated Financial Statements for further information about the
Group‘s impairment methodology.
Loans to customers ........................................................................................
Derivatives .....................................................................................................
Other assets ...................................................................................................
Condensed Interim Consolidated Financial Statements 31 March 2025 ‐ Unaudited 27
===== SIDA 31 =====
Kvika banki hf. Amounts are in ISK thousands
Notes to the Condensed Interim Consolidated Financial Statements
42
42. Credit quality of financial assets (cont.)
a.
Impairment Listed Unlisted
Claim due to expected Carrying Total securities and securities and Residential Commercial Industrial Unsecured
31.3.2025 value credit loss amount % collateral Deposits liquid funds other funds real estate real estate Automobiles equipment Guarantees Other claim value
6,022 (7) 6,015 0.0% 9,596 0 0 0 0 0 9,596 0 0 0 9
555 (1) 554 0.0% 0 0 0 0 0 0 0 0 0 0 554
Corporate
Real estate activities .................................. 49,170,162 (326,466) 48,843,697 30.4% 87,481,925 59,375 80,353 42,945 41,146,037 44,678,910 955,321 209,975 100,000 209,010 618,834
Construction .............................................. 18,001,872 (105,051) 17,896,822 11.1% 34,376,995 4,334 0 0 14,765,806 9,344,147 5,280,525 4,383,702 0 598,481 351,847
Service Activities ........................................ 16,601,713 (144,187) 16,457,526 10.2% 29,557,028 20,855 82,123 569,280 1,711,995 3,932,906 18,305,021 3,481,295 55,000 1,398,553 385,139
Activities of Holding Companies ................. 12,859,939 (674,808) 12,185,132 7.6% 31,459,319 5,561 35,116 14,394,241 6,164,914 7,301,060 1,496,909 177,470 1,455,340 428,708 3,169,657
Accommodat. and Food Service Activit. ..... 10,737,686 (62,498) 10,675,188 6.6% 19,892,407 52,295 0 0 1,497,803 17,722,370 540,626 44,461 0 34,853 660,548
Wholesale and Retail Trade ....................... 4,471,674 (42,412) 4,429,263 2.8% 8,129,269 24,075 0 1,610,000 246,700 287,589 3,425,104 1,903,163 100,000 532,638 392,827
Other ......................................................... 10,548,620 (40,897) 10,507,724 6.5% 23,831,556 527,167 4,631,150 343,076 3,206,307 7,861,385 2,221,514 2,082,072 21,500 2,937,386 441,015
40,451,707 (870,796) 39,580,912 24.6% 56,968,806 36,288 623,191 635,266 11,185,429 1,829,013 40,370,551 977,683 0 1,311,386 8,132,234
Total 162,849,952 (2,267,121) 160,582,831 100.0% 291,706,900 729,949 5,451,933 17,594,808 79,924,989 92,957,379 72,605,166 13,259,822 1,731,840 7,451,014 14,152,665
Impairment Listed Unlisted
Claim due to expected Carrying Total securities and securities and Residential Commercial Industrial Unsecured
31.12.2024 value credit loss amount % collateral Deposits liquid funds other funds real estate real estate Automobiles equipment Guarantees Other claim value
6,982 (10) 6,972 0.0% 10,303 0 0 0 0 0 9,994 0 0 308 201
1,669 (4) 1,665 0.0% 0 0 0 0 0 0 0 0 0 0 1,665
Corporate
Real estate activities .................................. 45,564,368 (339,001) 45,225,367 30.1% 84,189,303 31,404 49,689 30,889 41,523,277 41,133,852 973,934 239,779 0 206,478 490,706
Construction .............................................. 16,412,343 (92,416) 16,319,928 10.9% 32,487,287 387 36 0 12,425,532 9,668,472 5,260,413 4,425,735 0 706,712 255,535
Service Activities ........................................ 16,067,877 (162,054) 15,905,824 10.6% 29,301,983 25,792 122,473 577,035 1,020,336 2,522,528 19,253,086 3,815,059 0 1,965,674 317,031
Accommodat. and Food Service Activit. ..... 11,491,746 (85,812) 11,405,934 7.6% 22,151,366 104,664 0 0 1,367,345 20,068,668 528,029 46,852 0 35,810 8,285
Activities of Holding Companies ................. 7,142,676 (653,572) 6,489,105 4.3% 20,066,039 13,417 201,232 9,761,948 4,863,693 3,343,574 216,524 183,137 1,467,788 14,726 1,434,099
Wholesale and Retail Trade ....................... 4,930,289 (55,744) 4,874,545 3.2% 7,473,811 24,075 0 0 246,700 913,378 3,601,133 1,952,169 100,000 636,356 383,870
Other ......................................................... 10,303,221 (66,197) 10,237,024 6.8% 29,558,579 342,028 7,208,007 162,634 3,389,662 11,277,426 2,176,217 2,189,640 21,500 2,791,466 415,340
40,608,567 (872,233) 39,736,334 26.5% 57,599,454 32,933 793,062 654,647 11,886,283 1,815,160 40,060,219 1,031,750 0 1,325,401 8,312,050
Total 152,529,739 (2,327,042) 150,202,696 100.0% 282,838,124 574,701 8,374,499 11,187,152 76,722,826 90,743,056 72,079,550 13,884,121 1,589,288 7,682,932 11,618,783
Breakdown of loans to customers by industry and information on collateral and other credit enhancements
The Group applies the same valuation methods to collateral held as other comparable assets held by the Group. For other types of assets the Group uses third party valuation where possible.
Public entities .................................................
Individual ........................................................
Financial institutions .......................................
Allocated collateral
Public entities .................................................
Financial institutions .......................................
Individual ........................................................
Collateral value is shown as the market‐ or accounting value of collateral allocated to exposures. Other collateral includes financial claims, inventories and receivables.
Allocated collateral
Condensed Interim Consolidated Financial Statements 31 March 2025 ‐ Unaudited 28
===== SIDA 32 =====
Kvika banki hf. Amounts are in ISK thousands
Notes to the Condensed Interim Consolidated Financial Statements
42
42. Credit quality of financial assets (cont.)
b.
31.3.2025
Loans to customers: Stage 1S t a g e 2S t a g e 3F V T P L T o t a l
99,470,393 2,093,869 17,616 101,581,879
40,247,447 3,696,799 43,944,246
6,098,616 2,689,377 8,787,993
778,201 537,345 1,315,546
7,013 623 5,771,054 114,000 5,892,689
397,906 178,460 1,289 749,945 1,327,600
Gross carrying amount 146,999,575 9,196,473 5,772,343 881,561 162,849,952
(340,111) (185,835) (1,741,175) (2,267,121)
Book value 146,659,464 9,010,638 4,031,168 881,561 160,582,831
Loan commitments, guarantees and unused credit facilities: Stage 1S t a g e 2S t a g e 3F V T P L T o t a l
4,670,623 27,619 4,698,243
2,688,852 23 2,688,875
669,163 9,495 678,658
953 458 1,411
0 21,718 21,718
38 38
Total off‐balance sheet amount 8,029,630 37,594 21,718 0 8,088,943
(11,058) (336) (1,773) (13,166)
Net off‐balance sheet amount 8,018,572 37,259 19,945 0 8,075,776
31.12.2024
Loans to customers: Stage 1S t a g e 2S t a g e 3F V T P L T o t a l
89,427,181 1,265,779 16,862 90,709,821
40,153,181 3,159,469 43,312,650
6,609,379 2,003,621 8,613,000
226,827 380,710 607,537
572 0 7,940,092 114,000 8,054,664
286,623 202,511 742,932 1,232,066
Gross carrying amount 136,703,762 7,012,091 7,940,092 873,794 152,529,739
(366,642) (189,275) (1,771,126) (2,327,042)
Book value 136,337,121 6,822,816 6,168,967 873,794 150,202,696
Loan commitments, guarantees and unused credit facilities: Stage 1S t a g e 2S t a g e 3F V T P L T o t a l
4,675,341 2,690 4,678,031
1,567,638 464 1,568,102
562,954 5,839 568,793
1,821 542 2,363
33,741 10,048 43,790
53 53
Total off‐balance sheet amount 6,807,754 9,589 33,741 10,048 6,861,132
(10,716) (149) (6,837) (17,701)
Net off‐balance sheet amount 6,797,038 9,440 26,905 10,048 6,843,431
The following tables show financial assets subject to the impairment requirements of IFRS 9 broken down by credit quality bands where band i
denotes the lowest credit risk and band iv the highest credit risk. Assets measured at fair value through profit or loss are not subject to the stage
classification requirements of IFRS 9 but are nevertheless included in the tables in order to give a more complete picture of the credit quality of
loans to customers and reconcile the tables to the carrying amount on the balance sheet. The Bank has primarily used calibrated external credit
ratings to assess the default probability of its customers. Some of the larger borrowers are furthermore individually assessed by credit specialist s.
The Bank has implemented internal credit rating models for part of the loan portfolio
and intends to continue this development in 2025.
Credit quality band I .............................................................................
Credit quality band II ............................................................................
Credit quality band III ...........................................................................
Credit quality band IV ..........................................................................
Credit quality of financial assets by credit quality band
Credit quality band III ...........................................................................
Credit quality band IV ..........................................................................
In default ..............................................................................................
Non‐rated .............................................................................................
Expected credit loss .............................................................................
Credit quality band I .............................................................................
In default ..............................................................................................
Non‐rated .............................................................................................
Expected credit loss .............................................................................
Credit quality band I .............................................................................
Credit quality band II ............................................................................
Expected credit loss .............................................................................
Credit quality band I .............................................................................
Credit quality band II ............................................................................
Credit quality band III ...........................................................................
Credit quality band IV ..........................................................................
In default ..............................................................................................
Credit quality band II ............................................................................
Credit quality band III ...........................................................................
Credit quality band IV ..........................................................................
In default ..............................................................................................
Non‐rated .............................................................................................
Non‐rated .............................................................................................
Expected credit loss .............................................................................
Condensed Interim Consolidated Financial Statements 31 March 2025 ‐ Unaudited 29
===== SIDA 33 =====
Kvika banki hf. Amounts are in ISK thousands
Notes to the Condensed Interim Consolidated Financial Statements
42
42. Credit quality of financial assets (cont.)
c. Breakdown of loans to customers into not past due and past due
31.3.2025 Claim Expected Carrying
value credit loss amount
149,591,763 (560,487) 149,031,276
6,889,940 (79,132) 6,810,808
2,105,854 (65,318) 2,040,536
678,687 (39,291) 639,396
533,054 (89,978) 443,076
1,703,299 (877,640) 825,659
1,347,355 (555,275) 792,080
Total 162,849,952 (2,267,121) 160,582,831
31.12.2024 Claim Expected Carrying
value credit loss amount
137,349,325 (624,970) 136,724,356
7,723,558 (104,273) 7,619,285
2,321,498 (72,912) 2,248,585
697,974 (16,044) 681,930
2,179,700 (820,218) 1,359,481
809,344 (248,026) 561,318
1,448,340 (440,599) 1,007,741
Total 152,529,739 (2,327,042) 150,202,696
d. Allowance for expected credit loss on loans to customers and loan commitments, guarantees and unused credit facilities
31.3.2025
Expected credit loss allowance total
Stage 1S t a ge 2S t a ge 3T o t a l
Transfers of financial assets:
Balance as at 1 January 2025 377,357 189,424 1,777,962 2,344,743
116,039 (69,813) (46,226) 0
(23,191) 46,002 (22,811) 0
(6,007) (24,881) 30,888 0
(133,940) 42,570 147,661 56,292
106,542 30,016 11,868 148,425
(85,631) (27,139) (97,206) (209,976)
(8) (59,189) (59,197)
Balance as at 31 March 2025 351,169 186,171 1,742,948 2,280,288
Expected credit loss allowance for loans to customers
Stage 1S t a g e 2S t a g e 3T o t a l
Transfers of financial assets:
Balance as at 1 January 2025 366,642 189,275 1,771,126 2,327,042
110,735 (69,769) (40,965) 0
(22,705) 44,870 (22,165) 0
(6,002) (24,861) 30,863 0
(127,709) 43,421 146,868 62,581
104,056 30,016 11,843 145,915
(84,905) (27,109) (97,206) (209,219)
(8) (59,189) (59,197)
Balance as at 31 March 2025 340,111 185,835 1,741,175 2,267,121
Past due 91‐180 days ................................................................................................................................
Past due 181‐360 days ..............................................................................................................................
Past due more than 360 days ...................................................................................................................
Not past due .............................................................................................................................................
Past due 1‐30 days ....................................................................................................................................
Past due 31‐60 days ..................................................................................................................................
Not past due .............................................................................................................................................
Past due 1‐30 days ....................................................................................................................................
Past due 31‐60 days ..................................................................................................................................
Past due 61‐90 days ..................................................................................................................................
The following tables show changes in the expected credit loss allowance of loans to customers and for loan commitments, guarantees and unused
credit facilities during the year.
Transfer to Stage 1 ‐ (Initial recognition) ..................................................................
Transfer to Stage 2 ‐ (significantly increased credit risk) .........................................
Transfer to Stage 3 ‐ (credit impaired) .....................................................................
Net remeasurement of loss allowance ..........................................................................
New financial assets, originated or purchased ..............................................................
Past due 61‐90 days ..................................................................................................................................
Past due 91‐180 days ................................................................................................................................
Past due 181‐360 days ..............................................................................................................................
Past due more than 360 days ...................................................................................................................
New financial assets, originated or purchased ..............................................................
Derecognitions and maturities ......................................................................................
Write‐offs .......................................................................................................................
Derecognitions and maturities ......................................................................................
Write‐offs .......................................................................................................................
Transfer to Stage 1 ‐ (Initial recognition) ..................................................................
Transfer to Stage 2 ‐ (significantly increased credit risk) .........................................
Transfer to Stage 3 ‐ (credit impaired) .....................................................................
Net remeasurement of loss allowance ..........................................................................
Condensed Interim Consolidated Financial Statements 31 March 2025 ‐ Unaudited 30
===== SIDA 34 =====
Kvika banki hf. Amounts are in ISK thousands
Notes to the Condensed Interim Consolidated Financial Statements
42
42. Credit quality of financial assets (cont.)
Expected credit loss allowance for loan commitments, guarantees and unused credit facilities
Stage 1S t a g e 2S t a g e 3T o t a l
Transfers of financial assets:
Balance as at 1 January 2025 10,716 149 6,837 17,701
5,304 (44) (5,260) 0
(486) 1,132 (647) 0
(5) (21) 26 0
(6,231) (851) 793 (6,289)
2,486 25 2,511
(726) (30) (757)
Balance as at 31 March 2025 11,058 336 1,773 13,166
31.12.2024
Expected credit loss allowance total
Stage 1S t a g e 2S t a g e 3T o t a l
Transfers of financial assets:
Balance as at 1 January 2024 381,793 128,058 1,724,497 2,234,348
103,709 (21,728) (81,980) 0
(16,599) 30,091 (13,492) 0
(32,445) (35,343) 67,787 0
(174,510) 15,696 844,723 685,909
270,830 120,489 223,571 614,890
(155,102) (46,969) (581,259) (783,330)
(319) (871) (405,885) (407,074)
Balance as at 31 December 2024 377,357 189,424 1,777,962 2,344,743
Expected credit loss allowance for loans to customers
Stage 1S t a g e 2S t a g e 3T o t a l
Transfers of financial assets:
Balance as at 1 January 2024 367,895 127,520 1,723,244 2,218,660
103,031 (21,403) (81,628) 0
(16,554) 30,023 (13,469) 0
(32,223) (35,288) 67,512 0
(173,549) 15,760 843,243 685,453
267,848 120,449 219,213 607,510
(149,489) (46,916) (581,102) (777,507)
(319) (871) (405,885) (407,074)
Balance as at 31 December 2024 366,642 189,275 1,771,126 2,327,042
Expected credit loss allowance for loan commitments, guarantees and unused credit facilities
Stage 1S t a g e 2S t a g e 3T o t a l
Transfers of financial assets:
Balance as at 1 January 2024 13,897 538 1,253 15,688
677 (325) (352) 0
(45) 68 (23) 0
(221) (54) 276 0
(961) (63) 1,480 456
2,982 39 4,359 7,380
(5,613) (53) (156) (5,823)
Balance as at 31 December 2024 10,716 149 6,837 17,701
Transfer to Stage 1 ‐ (Initial recognition) ..................................................................
Transfer to Stage 2 ‐ (significantly increased credit risk) .........................................
Transfer to Stage 3 ‐ (credit impaired) .....................................................................
Transfer to Stage 3 ‐ (credit impaired) .....................................................................
Net remeasurement of loss allowance ..........................................................................
New financial assets, originated or purchased ..............................................................
Derecognitions and maturities ......................................................................................
Write‐offs .......................................................................................................................
Transfer to Stage 1 ‐ (Initial recognition) ..................................................................
Net remeasurement of loss allowance ..........................................................................
New financial assets, originated or purchased ..............................................................
Derecognitions and maturities ......................................................................................
Transfer to Stage 1 ‐ (Initial recognition) ..................................................................
Transfer to Stage 2 ‐ (significantly increased credit risk) .........................................
Transfer to Stage 2 ‐ (significantly increased credit risk) .........................................
Transfer to Stage 3 ‐ (credit impaired) .....................................................................
Net remeasurement of loss allowance ..........................................................................
New financial assets, originated or purchased ..............................................................
Derecognitions and maturities ......................................................................................
Write‐offs .......................................................................................................................
Transfer to Stage 1 ‐ (Initial recognition) ..................................................................
Transfer to Stage 2 ‐ (significantly increased credit risk) .........................................
Transfer to Stage 3 ‐ (credit impaired) .....................................................................
Net remeasurement of loss allowance ..........................................................................
New financial assets, originated or purchased ..............................................................
Derecognitions and maturities ......................................................................................
Condensed Interim Consolidated Financial Statements 31 March 2025 ‐ Unaudited 31
===== SIDA 35 =====
Kvika banki hf. Amounts are in ISK thousands
Notes to the Condensed Interim Consolidated Financial Statements
42
43. Loan ‐to‐value
a. General
b. Breakdown
31.3.2025 % 31.12.2024 %
41,302,685 25.7% 41,225,065 27.4%
61,379,963 38.2% 57,209,422 38.1%
34,883,268 21.7% 33,497,440 22.3%
4,467,587 2.8% 2,958,378 2.0%
4,091,309 2.5% 3,461,194 2.3%
2,326,403 1.4% 1,505,210 1.0%
889,814 0.6% 1,378,437 0.9%
No or negligible collateral:
11,241,803 7.0% 8,967,551 6.0%
Total 160,582,831 100.0% 150,202,696 100.0%
44. Collateral against exposures to derivatives
Fixed Variable Other
income income Real fixed
Deposits securities securities estate assets Other 31.3.2025
130,349 173,719 473,911 777,979
863,089 137,585 1,792,010 2,792,684
125,471 8,185 112,152 245,808
Total 1,118,909 319,490 2,378,073 0 0 0 3,816,472
Fixed Variable Other
income income Real fixed
Deposits securities securities estate assets Other 31.12.2024
548,356 113,888 161,262 823,506
709,058 27,860 1,401,213 2,138,131
61,660 16,377 80,400 158,436
Total 1,319,073 158,125 1,642,874 0 0 0 3,120,073
45. Large exposures
31.3.2025 31.12.2024
Large exposures before risk adjusted mitigation Number Amount Number Amount
2 11,764,578 2 11,132,873
1 8,773,551 0 0
0 0 0 0
Total 3 20,538,129 2 11,132,873
2 14,442,123 1 6,521,624
2 16,484,456 1 6,702,213
In accordance with regulation no. 575/2013 of the European Union on prudential requirements for credit institutions, which was incorporated
into Icelandic law with Act No. 38/2022, total exposure towards a customer is classified as a large exposure if it exceeds 10% of the financial
institution's Tier 1 capital (see note 36).
According to the regulation a single exposure, net of risk adjusted mitigation, cannot exceed 25% of the eligible Tier 1 capital. Based on Icelandic
rules no. 789/2022 on the Application of Optional Provisions and Authorisations Pursuant to the Act on Financial Undertakings, the value of
exposures towards financial institutions shall not exceed 25% of the eligible Tier 1 capital or 10 bn. ISK, whichever is higher. Single large exposure s
net of risk adjusted mitigation take into account the effects of collateral and other credit enhancements held by the financial institution, and
other credit enhancements, in accordance with regulation no. 575/2013.
The loan‐to‐value ratio (LTV) is the ratio of the gross amount of the loan to the value of the collateral, if any. The general creditworthiness of a
customer is viewed as the most reliable indicator of credit quality of a loan. Besides collateral included in the LTV ratios the Group uses other risk
mitigation measures, such as guarantees, negative pledge, cross‐collateral and collateralization of non‐quantifiable assets.
The breakdown of loans to customers by LTV is specified as follows:
Less than 50% .................................................................................................................
50‐70% ............................................................................................................................
70‐90% ............................................................................................................................
90‐100% ..........................................................................................................................
Individuals ..............................................
Amounts have been adjusted to exclude collateral in excess of claim value, i.e. overcollateralisation.
100‐125% ........................................................................................................................
125‐200% ........................................................................................................................
Other loans with no collateral ..................................................................................
The Group applies the same valuation methods to collateral held as other comparable assets held by the Group. Haircuts are applied to account
for liquidity and other factors which may affect the collateral value of the asset.
10‐20% of capital base ...................................................................................................
20‐25% of capital base ...................................................................................................
Exceeding 25% of capital base .......................................................................................
Thereof loans to credit institutions which are part of
Large exposures net of risk adjusted mitigation ............................................................
Kvika's liquidity management .....................................................................................
Financial institutions ..............................
Corporate customers ..............................
Financial institutions ..............................
Corporate customers ..............................
Individuals ..............................................
Greater than 200% .........................................................................................................
Condensed Interim Consolidated Financial Statements 31 March 2025 ‐ Unaudited 32
===== SIDA 36 =====
Kvika banki hf. Amounts are in ISK thousands
Notes to the Condensed Interim Consolidated Financial Statements
45
46. Liquidity risk
a. Definition
b. Management
31.3.2025 Unweighted Weighted Unweighted Weighted Unweighted Weighted
87,544,549 87,544,549 4,066,957 4,066,957 91,611,506 91,611,506
671,354 570,650 671,354 570,650
Total liquid assets 88,215,903 88,115,200 4,066,957 4,066,957 92,282,859 92,182,156
124,760,857 21,194,216 7,275,077 3,329,201 132,035,934 24,523,417
114,633 114,633 114,633 114,633
32,969,161 28,242,174 2,246,023 287,907 35,215,184 28,530,081
Total outflows (0‐30 days) 157,730,018 49,436,390 9,635,734 3,731,741 167,365,752 53,168,131
553,231 553,231 14,702,785 14,702,785 15,256,016 15,256,016
20,122,873 4,094,573 1,123,083 731,370 21,245,956 4,825,943
(12,635,349)
Total inflows (0‐30 days) 20,676,104 4,647,804 15,825,868 2,798,806 36,501,972 20,081,959
197% 436% 279%
31.12.2024 Unweighted Weighted Unweighted Weighted Unweighted Weighted
68,949,963 68,949,963 3,458,943 3,458,943 72,408,906 72,408,906
823,384 699,877 823,384 699,877
Total liquid assets 69,773,348 69,649,840 3,458,943 3,458,943 73,232,290 73,108,783
122,659,515 23,181,070 8,568,256 4,253,944 131,227,770 27,435,014
17,389 17,389 17,389 17,389
13,201,433 8,729,875 2,471,047 411,573 15,672,480 9,141,447
Total outflows (0‐30 days) 135,878,337 31,928,334 11,039,303 4,665,517 146,917,639 36,593,850
691,525 691,525 9,867,085 9,867,085 10,558,610 10,558,610
16,441,026 4,838,298 1,321,647 879,390 17,762,673 5,717,688
(7,247,337)
Total inflows (0‐30 days) 17,132,551 5,529,823 11,188,731 3,499,138 28,321,283 16,276,298
264% 297% 360%
31.3.2025 31.12.2024
159% 144%
Short‐term deposits with other banks ...................................
Other inflows ..........................................................................
ISK Foreign currency Total
Liquid assets level 1 ................................................................
Liquid assets level 2 ................................................................
ISK Foreign currency Total
Liquid assets level 1 ................................................................
Liquid assets level 2 ................................................................
Short‐term deposits with other banks ...................................
Restrictions on inflows ...........................................................
Liquidity coverage ratio ..........................................................
Deposits ..................................................................................
Other borrowings ...................................................................
Other outflows .......................................................................
NSFR total ...........................................................................................................................................................................
Other inflows ..........................................................................
Restrictions on inflows ...........................................................
Liquidity coverage ratio ..........................................................
Deposits ..................................................................................
Other borrowings ...................................................................
Other outflows .......................................................................
Liquidity risk is the risk that the Group will encounter difficulty in meeting contractual payment obligations associated with its financial liabil ities
that are settled by delivering cash or another financial asset. This risk mainly arises from mismatches in the timing of cash flows. The Group has
internal rules that require certain matching of the maturities of assets and liabilities. Furthermore, to ensure the ability to meet liquidity needs ,t h e
Group maintains a stock of highly liquid unencumbered assets, e.g. cash, treasury bills and treasury bonds.
Liquidity is managed by treasury and monitored by risk management. Liquidity position is reported to the ALCO committee. The Central Bank of
Iceland sets minimum requirements for the liquidity coverage ratio (LCR) and the net stable funding ratio (NSFR). The minimum 30 day LCR
regulatory requirement is 100% for LCR total, 50% minimum requirement for LCR in ISK and 80% minimum requirement for LCR in EUR. The
minimum requirement for LCR EUR only applies when the Group‘s commitments in EUR represent 10% or more of the Group´s total commitments.
The minimum regulatory requirement for NSFR total is 100%.
Condensed Interim Consolidated Financial Statements 31 March 2025 ‐ Unaudited 33
===== SIDA 37 =====
Kvika banki hf. Amounts are in ISK thousands
Notes to the Condensed Interim Consolidated Financial Statements
45
46. Liquidity risk (cont.)
c. LCR deposit categories
31.3.2025 Run off date 0‐30 days Over 30 days Total
5%‐100% 106,998,878 17,731,416 124,730,294
5%‐100% 6,237,187 275,703 6,512,890
20%‐40% 11,814,050 135,117 11,949,167
40% 53,279 80,519 133,798
100% 6,932,540 14,305,523 21,238,063
3,385,441 71,104 3,456,545
Total 135,421,376 32,599,382 168,020,757
31.12.2024 Run off date 0‐30 days Over 30 days Total
5%‐100% 103,372,251 15,898,871 119,271,122
5%‐100% 5,807,269 199,576 6,006,845
20%‐40% 11,124,000 48,335 11,172,335
40% 81,008 82,903 163,911
100% 10,843,243 12,439,204 23,282,447
3,440,134 41,085 3,481,219
Total 134,667,905 28,709,974 163,377,879
The Group's deposit base is divided into different categories depending on customer type according to the LCR methodology. Different run off
rates are applied on each category representing their level of stickiness, which measures the stability of the deposit. Deposits with maturity over 30
days are defined as term deposits within the LCR calculations, other as demand deposits. Run off rates are applied on each category of demand
deposits and the expected cash outflow over the next 30 days under stressed conditions calculated. The higher the run off rate, the more high
quality liquid assets
the Group must hold to ensure it can meet its obligations and maintain stability during a crisis.
The table below shows the Group's deposit base divided into different categories depending on customer type and run off rates according to the
LCR methodology.
Individuals ...........................................................................................................................
Small and medium sized corporates ...................................................................................
*Pledged deposits do not have any run off rate according to liquidity rules.
Financial entities .................................................................................................................
Other * .................................................................................................................................
Large corporates .................................................................................................................
Financial entities .................................................................................................................
Other * .................................................................................................................................
Individuals ...........................................................................................................................
Small and medium sized corporates ...................................................................................
Large corporates .................................................................................................................
Public entities ......................................................................................................................
Public entities ......................................................................................................................
Condensed Interim Consolidated Financial Statements 31 March 2025 ‐ Unaudited 34
===== SIDA 38 =====
Kvika banki hf. Amounts are in ISK thousands
Notes to the Condensed Interim Consolidated Financial Statements
45
46. Liquidity risk (cont.)
d. Maturity analysis of financial assets and financial liabilities
31.3.2025 Up to 1 1‐3 3‐12 1‐5 Over 5 Gross inflow/ Carrying
Financial assets by type month months months years years (outflow) amount
Non‐derivative assets
43,947,907 43,947,907 43,909,157
14,720,164 169,744 8,172,567 1,308,293 24,370,768 24,081,301
13,968,354 16,855,884 50,723,160 102,910,228 5,091,600 189,549,227 160,582,831
18,481,027 627,547 8,481,734 30,995,460 3,579,382 62,165,150 62,165,150
1,997,498 3,605,297 5,602,795 5,602,795
8,835,823 8,835,823 8,835,823
7,447,979 475,700 1,304,623 4,230 9,232,532 10,703,784
109,398,753 18,128,876 72,287,380 135,218,211 8,670,982 343,704,202 315,880,842
Derivative assets
Inflow ....................................................... 10, 012,953 6,598,634 9,173,270 20,394,794 1,046,399 47,226,050
Outflow .................................................... (8, 763,503) (5,986,091) (8 ,639,982) (19, 773,211) (940,621) (44,103,408)
1,249,450 612,543 533,288 621,583 105,778 3,122,642 2,572,600
Up to 1 1‐3 3‐12 1‐5 Over 5 Gross inflow/ Carrying
Financial liabilities by type month months months years years (outflow) amount
Non‐derivative liabilities
(135,395,695) (12,861,226) (18,966,883) (1,545,974) (581,088) (169,350,866) 168,020,757
(278,638) (1,096,976) (16,508,771) (71,287) (17,955,672) 13,915,528
(114,633) (538,171) (3,435,247) (45,618,287) (2,565,999) (52,272,338) 47,767,413
(78,907) (260,807) (1,413,760) (9,400,408) (11,153,883) 5,766,866
(521,286) (521,286) 521,286
(4,789) (4,789) 4,789
(27,942,763) (6,855,617) (1,096,536) (2,367,830) (38,262,747) 38,219,103
(163,979,166) (20,612,560) (24,856,449) (67,454,623) (12,618,782) (289,521,581) 274,215,742
Derivative liabilities
Inflow ....................................................... 5, 157,974 168,890 8,586,120 10,117,494 24,030,478
Outflow .................................................... (5, 406,357) (187,733) (9 ,172,580) (10,420, 441) (25,187,111)
(248,383) (18,843) (586,460) (302,947) 0 (1,156,633) 646,696
Unrecognised financial items
Inflow ....................................................... 90,082 399,838 5,133,203 2,670,243 8,293,366
Outflow .................................................... (7, 559,281) (7,559,281)
Inflow ....................................................... 254, 589 75,350 192,654 7,068 529,662
Outflow .................................................... ( 529,662) (529,662)
(7,998,861) 654,428 5,208,553 2,862,898 7,068 734,086
Summary
109,398,753 18,128,876 72,287,380 135,218,211 8,670,982 343,704,202
1,249,450 612,543 533,288 621,583 105,778 3,122,642
(163,979,166) (20,612,560) (24,856,449) (67,454,623) (12,618,782) (289,521,581)
(248,383) (18,843) (586,460) (302,947) (1,156,633)
unrecognised items (53,579,346) (1,889,985) 47,377,759 68,082,224 (3,842,022) 56,148,630
(7,998,861) 654,428 5,208,553 2,862,898 7,068 734,086
Net assets (liabilities) (61,578,207) (1,235,558) 52,586,312 70,945,122 (3,834,954) 56,882,715
Loans to credit institutions ............................
Deposits ........................................................
Borrowings .....................................................
Securities used for hedging ...........................
Loans to customers ........................................
Other assets ...................................................
Cash and balances with Central Bank ...........
Shares and other variable income securities
Fixed income securities .................................
Other liabilities ..............................................
Loan commitments
Financial guarantee contracts
Net unrecognised items ................................
Net assets (liabilities) excluding
Issued bonds ..................................................
Subordinated liabilities ..................................
Short positions used for hedging ..................
Short positions held for trading ....................
Derivative assets ............................................
Derivative liabilities .......................................
Non‐derivative assets ....................................
Non‐derivative liabilities ...............................
Condensed Interim Consolidated Financial Statements 31 March 2025 ‐ Unaudited 35
===== SIDA 39 =====
Kvika banki hf. Amounts are in ISK thousands
Notes to the Condensed Interim Consolidated Financial Statements
45
46. Liquidity risk (cont.)
31.12.2024 Up to 1 1‐3 3‐12 1‐5 Over 5 Gross inflow/ Carrying
Financial assets by type month months months years years (outflow) amount
Non‐derivative assets
18,594,600 18,594,600 18,593,420
9,725,772 1,803,799 11,529,571 11,529,571
10,753,174 13,421,261 52,863,444 98,218,396 4,717,898 179,974,173 150,202,696
17,597,452 10,341,336 7,441,664 25,482,060 3,932,049 64,794,561 64,794,561
1,680,808 3,751,446 5,432,254 5,432,254
12,601,026 12,601,026 12,601,026
2,736,416 2,397,217 1,543,015 3,241 6,679,889 7,703,693
73,689,249 26,159,814 65,599,568 125,507,496 8,649,948 299,606,074 270,857,221
Derivative assets
Inflow ....................................................... 13, 278,709 143,152 2,346,210 919,853 1,035,591 17,723,515
Outflow .................................................... (12, 289,408) (97,836) (2, 328,850) (796,329) ( 940,293) (16,452,715)
989,301 45,317 17,360 123,524 95,298 1,270,801 1,196,744
Up to 1 1‐3 3‐12 1‐5 Over 5 Gross inflow/ Carrying
Financial liabilities by type month months months years years (outflow) amount
Non‐derivative liabilities
(134,688,378) (15,129,906) (10,446,751) (3,739,302) (546,778) (164,551,115) 163,377,879
(1,116) (300,900) (1,131,757) (17,271,191) (18,704,964) 14,389,515
(17,389) (535,356) (3,318,805) (34,010,395) (2,556,883) (40,438,829) 37,123,285
(336,219) (1,399,210) (9,303,663) (11,039,092) 5,628,982
(153,001) (153,001) 153,001
(42,035) (42,035) 42,035
(1,418,300) (9,218,530) (1,121,501) (1,927,215) (13,685,545) 13,634,905
(136,320,219) (25,184,692) (16,355,033) (58,347,313) (12,407,324) (248,614,581) 234,349,602
Derivative liabilities
Inflow ....................................................... 12, 103,681 142,466 6,321,400 24,413,219 42,980,766
Outflow .................................................... (12, 967,739) (144,687) (6 ,240,000) (26,505, 659) (45,858,085)
(864,059) (2,221) 81,400 (2,092,440) 0 (2,877,319) 2,932,429
Unrecognised financial items by type
Loan commitments
Inflow ....................................................... 147, 100 48,777 2,796,249 3,721,970 6,714,096
Outflow .................................................... (6, 060,067) (6,060,067)
Inflow ....................................................... 1,000 756,021 36,976 7,068 801,065
Outflow .................................................... ( 801,065) (801,065)
(6,714,033) 49,777 3,552,270 3,758,946 7,068 654,029
Summary
73,689,249 26,159,814 65,599,568 125,507,496 8,649,948 299,606,074
989,301 45,317 17,360 123,524 95,298 1,270,801
(136,320,219) (25,184,692) (16,355,033) (58,347,313) (12,407,324) (248,614,581)
(864,059) (2,221) 81,400 (2,092,440) (2,877,319)
unrecognised items (62,505,729) 1,018,218 49,343,296 65,191,267 (3,662,078) 49,384,974
(6,714,033) 49,777 3,552,270 3,758,946 7,068 654,029
Net assets (liabilities) (69,219,761) 1,067,995 52,895,566 68,950,213 (3,655,010) 50,039,003
Loans to credit institutions ............................
It should be noted that the Group's expected cash flows sometimes vary considerably from the contractual cash flows, most significantly in that
demand deposits from customers are expected to remain stable or increase in the long term. In this case the presentation used reflects the worst
case scenario from the Group's perspective. Furthermore, the analysis does not consider any measures that could be taken to convert long ‐term
assets to cash through sale.
Cash flows relating to unrecognised balance sheet items (unused loan commitments and financial guarantee contracts) are presented separately
from financial assets and financial liabilities. Both contractual outflows and inflows are shown, to fully reflect the nature of these items.
Derivative liabilities .......................................
Net unrecognised items ................................
Net assets (liabilities) excluding
Maturity analysis of financial assets and financial liabilities is based on contractual cash flows or, in the case of held for trading securities, exp ected
cash flows. If an amount receivable or payable is not fixed, e.g. for inflation indexed assets and liabilities, the maturity analysis uses estimates
based on current conditions.
Loans to customers
........................................
Fixed income securities .................................
Non‐derivative liabilities ...............................
Deposits ........................................................
Borrowings .....................................................
Subordinated liabilities ..................................
Short positions held for trading ....................
Short positions used for hedging ..................
Other liabilities ..............................................
Derivative assets ............................................
Issued bonds ..................................................
Financial guarantee contracts
Non‐derivative assets ....................................
Other assets ...................................................
Cash and balances with Central Bank ...........
Shares and other variable income securities
Securities used for hedging ...........................
Condensed Interim Consolidated Financial Statements 31 March 2025 ‐ Unaudited 36
===== SIDA 40 =====
Kvika banki hf. Amounts are in ISK thousands
Notes to the Condensed Interim Consolidated Financial Statements
46
47. Market risk
a. Definition
b. Management
48. Interest rate risk
a. Definition
b. Management
49. Interest rate risk associated with trading portfolios
a. Breakdown
Up to 1 1‐3 3‐12 1‐5 Over 5
month months months years years 31.3.2025
93,209 16,847 413,603 1,758,782 859,643 3,142,084
(23,402) (157,640) (340,244) (521,286)
Net imbalance 93,209 16,847 390,201 1,601,141 519,399 2,620,798
Up to 1 1‐3 3‐12 1‐5 Over 5
month months months years years 31.12.2024
21,513 54,416 548,207 3,180,837 1,538,440 5,343,413
(676) (6,875) (803) (28,575) (116,073) (153,001)
Net imbalance 20,837 47,541 547,404 3,152,263 1,422,367 5,190,412
b. Sensitivity analysis
Shift in 31.3.2025 31.12.2024
basis points Downward Upward Downward Upward
50 27,373 (25,977) 53,265 (51,070)
100 26,808 (25,405) 67,180 (64,264)
Total 54,181 (51,381) 120,445 (115,334)
The Group performs monthly sensitivity analysis on financial assets and liabilities in trading portfolios that are subject to interest rate risk. Th e
sensitivity analysis assumes a shift in the yield curves for all currencies. A parallel shift in yield curves would have the following impact on the
Group's pre‐tax
profit and equity, assuming all other risk factors remain constant:
Indexed .....................................................................................................
Non‐indexed .............................................................................................
Market risk constitutes risk due to changes in the market prices of financial instruments and comprises interest rate risk, currency risk and other
price risk. Notes 48‐53 relate to market risk exposure.
The Group has a strict policy on controlling market risk and to keep the exposure within set limits. The risk management unit monitors market risk
limits on a daily basis and reports regularly to the ALCO committee and to the CEO.
The Group's exposure to interest rate risk is twofold. On the one hand, the Group has a proprietary portfolio of bonds, where market rates affect
prices and any fluctuations are recognised in the income statement. On the other hand, the Group has mismatch in assets and liabilities with
fixed interest terms. These include loans and swap contracts for securities on the asset side and borrowings and deposits on the liability side. This
mismatch does not create an immediate effect on the income
statement but nevertheless affects the Group's economic value.
The Group takes measures to minimise interest rate risk by matching the interest rate profile and duration of assets with the Group's liabilities as
well as using derivative and non‐derivative financial instruments to manage effectively the risk of an adverse impact on the Group's earnings.
Proprietary positions which are subject to interest rate risk fall under the scope of the Group's market risk management.
Fixed income securities ....................................................
Short positions ‐ fixed income securities .........................
Fixed income securities ....................................................
Short positions ‐ fixed income securities .........................
The breakdown of financial assets and liabilities in trading portfolios by the earlier of interest repricing time or maturity is specified as follows:
Condensed Interim Consolidated Financial Statements 31 March 2025 ‐ Unaudited 37
===== SIDA 41 =====